DOJ to provide confidential supervisory info to ex-JPMorgan traders
The criminal proceedings targeting former JPMorgan traders Gregg Smith, Michael Nowak, Jeffrey Ruffo, and Christopher Jordan continue at the Illinois Northern District Court. On February 9, 2021, the Department of Justice (DOJ) filed a motion with the Court asking to amend the protective order in this case, which accuses the former traders of spoofing.
The DOJ explains that it may provide certain materials to the defendants that contain:
“confidential supervisory information” of the Board of Governors of the Federal Reserve System, as defined in 12 C.F.R. § 261.2, and/or
“non-public OCC information” of the Office of the Comptroller of the Currency, as defined in 12 C.F.R. § 4.32(b).
The additional provisions in the amended protective order include, among other things, that the government will notify the defendants when any materials provided to the defendants contain Supervisory Information and that any party who needs to file with the Court any materials containing Supervisory Information, or divulge the contents of Supervisory Information in court filings, will move to file the Supervisory Information under seal.
Back in 2019, the DOJ launched these criminal proceedings against the former JPMorgan precious metals futures traders. The indictment alleges that the defendants engaged in widespread spoofing, market manipulation and fraud while working at JPMorgan through the placement of orders they intended to cancel before execution in an effort to create liquidity and drive prices toward orders they wanted to execute on the opposite side of the market.
The use of documents by defendants in criminal cases appears to be a controversial matter. Earlier this month, former Citi FX trader Rohan Ramchandani has confirmed that he destroyed the documents used in the criminal case brought by the Department of Justice against him and Richard Usher. Ramchandani, who faced criminal charges over manipulating the Forex spot market, is now bracing for proceedings brought by the OCC. And, yet, he was not allowed to use the documents from the criminal case in the OCC proceedings.
Ramchandani sought to use 58 documents which had earlier been produced to him by the Government (during his criminal case). These documents included traders’ chat transcripts.
The Court, however, has nixed Ramchandani’s ambitions in this respect and has ordered him to destroy the discovery in his possession.