Former JPMorgan traders seek acquittal in spoofing case
As the trial of former JPMorgan traders accused of spoofing continues, Michael Nowak, Gregg Smith and Jeffrey Ruffo seek acquittal.
On July 22, 2022, Nowak, Smith and Ruffo filed motions for judgments of acquittal with the Illinois Northern District Court.
Back in 2019, the DOJ launched 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.
Now, as the trial progresses, the three traders push for acquittal.
Michael Nowak seeks a judgment of acquittal on Counts 1, 2, 4, 13 through 22, 25, and 27 of the Second Superseding Indictment. Mr. Nowak seeks a judgment of acquittal on grounds that the evidence introduced during the Government’s case in chief as to each and every element of the crimes with which he is charged is insufficient to sustain a conviction.
Gregg Smith seeks a judgment of acquittal on Counts 1, 2, 3, 5 through 12, 24, and 26 of the Second Superseding Indictment.
Mr. Smith argues that, as to the conspiracy counts (Counts 1 and 2), the Government has failed to adduce sufficient evidence to establish: (i) the existence of the charged conspiracies; (ii) that Mr. Smith (or any of his alleged co-conspirators, for that matter) agreed to engage in a pattern of racketeering activity or to commit price manipulation, wire fraud affecting a financial institution, commodities fraud, and/or spoofing; and/or (iii) that Mr. Smith knowingly participated in any of the alleged conspiracies with the intention of furthering them.
As to the fraud-based counts (Counts 1, 5-12, and 24), according to Mr Smith, the Government has failed to adduce sufficient evidence of the existence of a scheme to defraud or that Mr. Smith made a false or fraudulent statement in furtherance of that scheme. The Government has also failed to adduce sufficient evidence that Mr. Smith acted with intent to defraud and that he did not act with the honest belief that his actions did not involve a materially false or fraudulent representation (i.e., he acted in good faith and therefore lacked the requisite intent to defraud).
Also, as to the spoofing count (Count 26) and the fraud-based counts (Counts 1, 5-12, and 24), Mr Smith says that the Government has failed to adduce sufficient evidence that Mr. Smith placed orders with the intent to cancel before execution.
Regarding the attempted manipulation count (Count 3), Mr Smith argues that the Government has failed to adduce sufficient evidence that Mr. Smith intended to create an artificial price and that he knowingly took a substantial step towards creating an artificial price.
Jeffrey Ruffo moves the Court for a judgment of acquittal pursuant to Rule 29(a) of the Federal Rules of Criminal Procedure. In the Second Superseding Indictment, Mr. Ruffo was charged with two crimes:
- Count One: Conspiracy to Conduct or Participate in an Enterprise Engaged in a Pattern of Racketeering Activity, in violation of 18 U.S.C. § 1962(d); and
- Count Two: Conspiracy to Commit Price Manipulation, Wire Fraud Affecting a Financial Institution, Commodities Fraud, and Spoofing, in violation of 18 U.S.C. § 371.
According to Ruffo, the Court must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction. Though the Court “reviews the evidence presented at trial in the light most favorable to the government and draws all reasonable inferences in its favor,” it must determine whether “there is a reasonable basis in the record” for a guilty verdict.
The burden on a defendant is ordinarily high, but “the height of the hurdle depends directly on the strength of the government’s evidence.” Because no rational trier of fact could find that the Government proved each element of Mr. Ruffo’s alleged crimes beyond a reasonable doubt, this Court should enter a judgment of acquittal in favor of Mr. Ruffo on both counts, the defendant says.
The jury trial is set to continue on July 28, 2022.