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CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

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Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#171

Post by evanpw »

BizarroLand wrote: post #164
axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

If any of us had the opportunity to make $1 billion dollars and pay a $920 million dollar "naughty boy" fine after the fact, who here would say no? The fine should be ALL of the ill-gotten gains and then a naughty boy fine on top of it. To do otherwise means that you did not do justice.

That's exactly what they did. The article says $172m disgorgement (how much the CFTC thinks they profited from this), $311m restitution (the amount the CFTC thinks JPM harmed others but didn't capture), and $436m civil penalty ("naughty boy" fine).

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#172

Post by TrainedMonkey »

BizarroLand wrote: post #164
axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

If any of us had the opportunity to make $1 billion dollars and pay a $920 million dollar "naughty boy" fine after the fact, who here would say no? The fine should be ALL of the ill-gotten gains and then a naughty boy fine on top of it. To do otherwise means that you did not do justice.

I feel like both you and parent are ignoring operational + reputation costs of being naughty boys. If we are saying the bad behavior should not be profitable the fine should be above (ill gotten gains - operational costs it took to acquire them + whatever interest those ill gotten gains received before the culprit got caught).

Reputational losses are also a thing, agencies and whistleblowers will be paying a lot more attention to this sort of thing from JPMorgan from now on. Maybe a lesser effect would be morally conscious people (in finance haha) choosing not to work there.

Of course it is also possible that Chase PR machine greases the right hands to negate all of the downsides, and then you have a point that current political/regulatory climate is allowing this is be a profitable business model.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#173

Post by BizarroLand »

evanpw wrote: post #171
BizarroLand wrote: post #164

Earlier quoted context omitted.

If any of us had the opportunity to make $1 billion dollars and pay a $920 million dollar "naughty boy" fine after the fact, who here would say no? The fine should be ALL of the ill-gotten gains and then a naughty boy fine on top of it. To do otherwise means that you did not do justice.

That's exactly what they did. The article says $172m disgorgement (how much the CFTC thinks they profited from this), $311m restitution (the amount the CFTC thinks JPM harmed others but didn't capture), and $436m civil penalty ("naughty boy" fine).

I read that also, but it wasn't clear to me that the disgorgement was the profit, I assumed it was just what they had on hand from their takings, like if you rob a bank and get caught with $5k left then they would disgorge you of the $5k and then deal with the rest later.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#174

Post by phyalow »

awestroke wrote: post #95
ushakov wrote: post #35

I bet even with $920M fine they're still profitable

These clowns give out 50m bonus checks to traders on a regular basis. They are more than fine, this fine probably corresponds to less than 5% of what they gained from spoofing trades to begin with

In 2021 nobody on the sellside in a trading seat is making $50m a year or anywhere close to that.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#175

Post by trident5000 »

thathndude wrote: post #70
axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

Executives needs to get jail time. But then they’ll just lobby for a new facility to be built in Aspen and for skiing to become part of the rehabilitation program. I have no answers. -Frustrated consumer protection attorney

Id also go lower down to trading managers who really know the day to day operations.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#176

Post by novok »

you-liquidated wrote: post #76
axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

US prosecutors literally said that they cannot criminally charge JPM (in another case) because that would destabilize the US financial system. They are literally "too big to jail".

I feel like in those cases, especially with corporations, you can do stuff like partial nationalization or confiscation of the bank then. "Your criminally irresponsible, so we will take over part of it as the more responsible party". It's the corporate equivalent of a criminal punishment, maybe the community service equivalent.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#177

Post by olalonde »

nly wrote: post #82
olalonde wrote: post #16

Earlier quoted context omitted.

If I understand correctly, the people harmed by the practice of spoofing are day traders who naively believe they can do technical analysis on an order book to determine the short-term direction of prices. Nope, I don't really feel sorry for either of them.

There are proprietary trading firms making hundreds of millions a year doing technical signal analysis.

Well, more reason not to feel sorry for them.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#178

Post by wanderinghogan »

andylynch wrote: post #8
wanderinghogan wrote: post #2

I wish the press release indicated how much JPMS gained, so I could know if JPMS is still significantly ahead after these penalties. Does the deferred criminal prosecution mean, basically, pay your fine and don't do it again and you won't be prosecuted? So they really face no long term negatives if they gained more by knowingly breaking the law and paying a fine later?

This whould be the $172M in disgorgement mentioned in the order.

thank you!

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#179

Post by arcticbull »

olalonde wrote: post #177
nly wrote: post #82

Earlier quoted context omitted.

There are proprietary trading firms making hundreds of millions a year doing technical signal analysis.

Well, more reason not to feel sorry for them.

That's not how crime works.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#180

Post by smabie »

dudeinjapan wrote: post #142
smabie wrote: post #26

Earlier quoted context omitted.

The algos are not trying to hit the spoof, they are using order book imbalance to modify their valuation. So the way it would work is that JPM could for example post a large spoof bid to trick the algos into aggressing into a JPM offer.

Yes, because the algos are being faked-out by the spoof. It's like being juked in basketball... if the algos were smart, they'd hit the spoof bid.

No they would not do this. Why would they want to hit the spoof bid?
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