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JP Morgan’s billion-dollar lawsuit



Five Year in the Making

As reported in a news outlet last September 23, J.P. Morgan Chase can pay almost 1 billion dollars as a settlement fine after its long-running lawsuit, which was filed way back in 2015 if it closes. It has come to light that the financial institution indeed paid fines and agreed to settle to pacify the investigations pressed against them. But could it be the End of it?

Spoofing Trades

A total of $920 million will be cough out by the bank, which includes $436.4 million fine, $311.7 million in restitution, and $172 million in disgorgement. It is a hefty fine that is a record for a spoofing case. Spoofing trading is defined as the practice of placing a buy or sell in the market without the intent of execution. After the economic meltdown in 2008, spoofing was put under the microscope. In 2010 it was made illegal in the U.S. by the Dodd-Frank Act of 2010 747. The practice is defined as “bidding or offering with the intent to cancel the bid or offer before execution.” 

Five Year in the Making

The case was filed against J.P. Morgan in 2015 by lawyer David Kovel on behalf of his clients, Daniel Shak, a hedge fund operator and big-stakes poker player, and Mark Grumet and Thomas Wacker, who was into metals trading.  The civil lawsuit accused the institution of manipulation in the silver futures market from 2010 until 2011, which cost the plaintiffs around $30 million in losses. 

J.P. Morgan initially dodged the case by denying all allegations and was eventually dismissed in 2016 by a judge. It was then reopened in 2017 when Kovel finally got his appeal for the case to be revisited. 

Cautious that it might drag on and before it cost them more financially and time-wise, J.P. Morgan settled. An individual familiar with the negotiations between the authorities and the bank said to Authorities that he believes that the government settlement with the bank will not cause any restrictions on how it conducts its business. Still, it is anticipated that the bank will admit to its wrongdoing. 

Is it the End?

JP Morgan still faces a class-action lawsuit after it settled its lawsuit led by Novel. Proceedings are happening in Chicago and Manhattan, but the latter was postponed not to affect the former. So it is not the End of the troubles of J.P. Morgan Chase.

An engineer by profession, a writer by calling.

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