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Photo: Michael Brochstein/SOPA Images/LightRocket via Getty Images

JPMorgan will pay $920 million to settle charges that its commodity trading desk manipulated the market, allowing the bank to rake in millions of dollars in profits, the government alleged.

Why it matters: It's the largest fine ever imposed for a "spoofing" case — and a milestone for government efforts to clamp down on the trading tactic criminalized after the financial crisis.

What they're saying: JPMorgan's "illegal trading significantly benefited JPM and harmed other market participants," the Commodity Futures Trading Commission, a key regulator, said in a release announcing the penalty.

Details: The case alleged JPMorgan trading desks placed hundreds of thousands of orders for trades they intended to cancel. The orders flooded the silver, gold and other metals and treasuries markets and manipulated prices in a way that would later benefit the bank. This is known as spoofing.

  • JPMorgan admitted to wrongdoing, though no restrictions were placed on the bank for the misconduct.
  • Three agencies — the Justice Department, the Securities & Exchange Commission and the Commodity Futures Trading Commission — were involved in the probes.

Flashback: Prosecutors charged former JPMorgan traders one year ago for "widespread spoofing" that spanned nearly a decade.

  • Two traders have already pleaded guilty, while four others are fighting the charges.
  • In 2015, JPMorgan settled with the DOJ and Federal Reserve and paid a $550 million fine for its role in manipulating the foreign exchange markets.

Go deeper

Dion Rabouin, author of Markets
Oct 16, 2020 - Economy & Business

Bank earnings soar again, even as their stock prices remain stagnant

Expand chart
Data: FactSet; Chart: Axios Visuals

JPMorgan, Goldman Sachs and Morgan Stanley all saw trading revenue rise more than 20% in the third quarter, with Morgan Stanley's earnings report Thursday showing profits jumped 25% from a year earlier to $2.72 billion and a 16% increase in revenue, which rose to $11.7 billion.

The big picture: Even after lackluster headline earnings from Bank of America and Wells Fargo, the five biggest U.S. investment banks are on pace to rake in $100 billion in trading revenue this year.

Focus group: Former Trump voters say he should never hold office again

Illustration: Sarah Grillo/Axios

"Relief" is the top emotion some swing voters who used to support Donald Trump say they felt as they watched President Biden's swearing-in, followed by "hope."

Why it matters: For voters on the bubble between parties, this moment is less about excitement for Biden or liberal politics than exhaustion and disgust with Trump and a craving for national healing. Most said Trump should be prohibited from ever holding office again.

Updated 13 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Politics: Biden unveils "wartime" COVID strategyBiden's COVID-19 bubble.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong to put tens of thousands on lockdown as cases surge.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.