Flashback – JPMorgan’s metals desk was ‘criminal enterprise,’ Justice Department says

Flashback – JPMorgan’s metals desk was ‘criminal enterprise,’ Justice Department says from Bloomberg via GATA

Originally published in Sept 2019

Blythe Masters, here’s a list of countries without extradition treaties with the United States:


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By Tom Schoenberg and David Voreacos
Bloomberg News
Monday, September 16, 2019

U.S. prosecutors took an unusually aggressive turn in their investigation of price fixing at JPMorgan Chase & Co., describing its precious metals trading desk as a criminal enterprise operating inside the bank for nearly a decade.

The prosecutors charged the head of JPMorgan’s global precious metals trading operation and two others on Monday, accusing them of “conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity.”

That’s a reference to the Racketeer Influenced and Corrupt Organizations Act, or RICO, a law often used against organized crime rings. The U.S. has rarely invoked RICO law in big bank cases. Its use suggests that JPMorgan may face deeper legal jeopardy, going beyond the several individuals who have already been prosecuted.

Former prosecutors agreed the move was bold, with at least one questioning whether the Justice Department was overreaching. Others said the use of RICO was merited given the complexity and duration of the manipulation, echoing the U.S. official who announced the charges Monday morning.

“Based on the fact that it was conduct that was widespread on the desk, it was engaged in in thousands of episodes over an eight-year period — that is precisely the kind of conduct that the RICO statute is meant to punish,” Assistant Attorney General Brian Benczkowski told journalists.

“We’re going to follow the facts wherever they lead, whether it’s across desks here or at any other bank or upwards into the financial institution,” he added.

Peter Carr, a Justice Department spokesman, said the RICO law has been invoked in cases involving small trading operations and in corporate-conduct cases. But he and several former prosecutors said they couldn’t recall another use of the law to prosecute traders at a big bank. …

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Chris Powell

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial commentator on the Internet (LeMetropoleCafe.com), and by Chris Powell, a newspaper editor in Connecticut. Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold. The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware in January 1999. Murphy became chairman and Powell secretary and treasurer.