London Daily

Focus on the big picture.
Tuesday, Aug 18, 2026

Ex-JPMorgan traders cleared of racketeering, found guilty of fraud

Ex-JPMorgan traders cleared of racketeering, found guilty of fraud

Case is seen as Justice Department's most aggressive to date targeting a manipulative futures trading tactic

Three former JPMorgan Chase & Co. employees were acquitted of racketeering and conspiracy charges in a landmark futures manipulation trial on Wednesday, although two were found guilty on other charges including fraud, a Department of Justice spokesperson said.

The case against the bank's former global precious metals desk head Michael Nowak, precious metals trader Gregg Smith and salesperson Jeffrey Ruffo is seen as the Justice Department's most aggressive to date targeting a manipulative futures trading tactic known as spoofing.

Nowak was convicted on 13 other charges including fraud, spoofing and attempted market manipulation, and Smith was convicted on 11 charges. Ruffo, who was only charged with racketeering and conspiracy, was acquitted of both. All three men had pleaded not guilty.

While financial reform advocates hailed the convictions as a clear signal that Wall Street executives are not above the law, attorneys said it underscored the difficulty of proving the more ambitious charges of racketeering and conspiracy.

Spoofing involves placing and then quickly canceling orders to falsely create the impression of high demand or supply. The three defendants were accused of using the tactic to manipulate futures on precious metals futures between 2008 and 2016.

"While we are gratified that the jury acquitted Mr. Nowak of racketeering and conspiracy, we are extremely disappointed by the jury's verdict on the whole, and will continue to seek to vindicate his rights in court," Nowak's attorney David Meister said.

Attorneys for Smith and Ruffo did not immediately provide comment.

Defense attorneys argued during the trial that Smith and Nowak's orders were not fraudulent. Ruffo was not a trader, and there was no evidence that he understood others were using illicit tactics, his attorney told jurors.


Their trial in Chicago began July 8 and hinged on testimony from two former JPMorgan metals traders who had pleaded guilty and cooperated with the government, as well as trading data that prosecutors said showed Smith and Nowak engaged in a repeated pattern of spoofing.

An American flag waves outside the U.S. Department of Justice Building in Washington, U.S., December 2, 2020. 


The case is part of a push by the Justice Department to crack down on spoofing and commodities market manipulation more broadly.

Spoofing was outlawed in 2010 when Congress passed the Dodd-Frank Act after the financial crisis. Since then, prosecutors have argued that earlier instances constituted fraud.

The racketeering statute, a federal law enacted in 1970 to take down the mafia, is rarely used to prosecute corporate crime. It allows prosecutors to charge a group of individuals, including those indirectly involved in alleged wrongdoing, on the basis they participated in a "criminal enterprise."

While the law also allows prosecutors to seek prison sentences of up to 20 years, Wednesday's verdict highlights that the charge can be tough to prove when it comes to competing traders on desks, said Robert Frenchman, a partner at Mukasey Frenchman LLP who was part of a trial team in 2018 that won a full acquittal for former UBS trader Andre Flotron.

Flotron had been charged with a single count of conspiracy to engage in commodities fraud.

"The reality is that traders have competing interests, run their own trading books, and often conduct themselves more like rivals than co-conspirators," Frenchman said.

Newsletter

Related Articles

0:00
0:00
Close
China’s Lifelike AI Humans Move From Livestreams Into Real-World Service Roles
UK Government Rolls Out £5.8 Billion Regional Investment Programme to Revive High Streets
AstraZeneca Ends Late-Stage Lung Cancer Trial After Data Shows No Survival Benefit
London Stocks Fall for Sixth Day as Bond Yields and Middle East Tensions Weigh on Markets
UK Government Rewrites Planning Rules to Accelerate Housing Near Transport Hubs
UK Wildfires Spread Across Southern England as Met Office Issues Severe Heat Warnings
British Doctors Warn Cancer Care Is at Risk as Hospitals Reject More Than a Quarter of Urgent Referrals
UK Hospitals Suspend Critical Care as Extreme Heat Exposes Infrastructure Failures
Sarah Ferguson Reportedly Retreats to Late Ex-Boyfriend's Swiss Chalet
Cristiano Ronaldo and Georgina Rodríguez Sign Prenup Protecting Their Separate Fortunes
Thieves Steal Antonello da Messina Renaissance Masterpieces From Sicilian Museum
Better.com Founder Who Fired 900 Employees on Zoom Is Ousted as CEO
Italian Speed Camera Issues Nearly 32,000 Fines in 10 Weeks, Worth More Than €3 Million
AI Manager at San Francisco Store Recommends Firing Human Employee
Google Launches Pixel 11 With Gemini AI at the Center of Its Hardware Strategy
Campaigners Press Government to Strengthen Rights for Four Million Gig Workers
Government Considers Higher Private Rents to Spread Asylum Accommodation Across UK
UK Moves to Protect Historic Pubs From Conversion Into Housing and Offices
Nigel Farage Wins Clacton By-Election to Return to House of Commons
British Manufacturers Report Rising Cybersecurity Threats Across Industrial Supply Chains
Royal Navy Increases Monitoring of Russian Ships in UK Waters by 25 Percent
England Adds More Than 350 Medical Training Posts to Strengthen NHS Capacity
NHS Waiting Lists Over 52 Weeks Rise by More Than 11,000 Patients
Brent Crude Near $88 Raises Fresh UK Energy Cost Concerns
UK Treasury Warns Prolonged Strait of Hormuz Disruption Could Cut 2027 Growth to 0.3 Percent
UK Economy Grows 0.4 Percent in Second Quarter as Energy and Inflation Risks Persist
UK Heatwave Triggers Emergency Alert as Government Unveils £65 Million Farm Support Package
Reform UK Unveils Plan to Cut Welfare Spending by More Than £50 Billion a Year
Prime Minister Andy Burnham Praised Extinction Rebellion for Doing a 'Great Service'
UK Wildfire Phone Alert Triggers Backlash as Users Switch Off Emergency Warnings
Heathrow Roads Reopen After Burst Water Main Floods Access to Terminals 2 and 3
Former NBA Players Enes Kanter Freedom and Royce White Say They Will Enter 2027 WNBA Draft
Former Cambridge Professor Jason Arday Found Dead Days After Resigning Amid Plagiarism Row
US Appeals Court Rules AI Agent's Website Actions Are Legally Attributed to the User
France's Constitutional Council Blocks Social Media Ban for Children Under 15
Liechtenstein Changes Royal Succession Rules to Allow Women to Inherit the Throne
Women Allege Rape and Sexual Abuse at British Army College for Teenage Recruits
Minnesota: Two independent investigators posed as Muslims (one wearing a burqa) and showed how they could vote in elections without identification.
UK Prime Minister Andy Burnham Takes Regional Tour to Highlight Local Infrastructure and Environmental Problems
Nigel Farage Wins Clacton By-Election to Return to the House of Commons
Bank of England Warns Rising Inflation Could Squeeze UK Household Incomes
UK Government Announces £65 Million Aid Package for Farmers Hit by Severe Drought
UK Economy Grows 0.4% in Second Quarter Despite Energy Market Pressures
UK Issues Emergency Alert as Severe Wildfires Spread Across England and Wales
UK and Finland Discuss European Defence and Continued Support for Ukraine
Nigel Farage Wins Clacton By-Election to Return to the House of Commons
UK Government Deploys Military to Help Fight Wildfires and Bans Disposable Barbecues
UK Records Hottest Day of the Year as Fifth Summer Heatwave Peaks in Southern England
UK Condemns Houthi Actions and Warns of Red Sea Threat to Global Trade
UK and Solomon Islands Open Wildlife Photography Exhibition in Honiara
×