There is still no settlement in the lawsuit accusing JPMorgan of unlawful and intentional manipulation of U.S. Treasury futures contracts and options on those contracts that trade on United States-based exchanges. This becomes clear from a letter submitted at the New York Southern District Court on March 17, 2021.

The parties in this case had previously indicated that there is some progress towards settlement in this case which targets JP Morgan Chase & Co., JP Morgan Clearing Corp., JP Morgan Securities LLC, JP Morgan Securities LLC, and John Does 1-25.

According to the latest update, however, the negotiations were not quite smooth.

In the letter filed with the Court on March 17, 2021, the parties says they exchanged mediation statements and participated in a virtual mediation through JAMS on February 16, 2021. The parties were unable to reach agreement at the February 16 mediation and negotiations slowed through early March.

But, since then, the parties have made substantial progress with the continued assistance of the mediator, such that the progress is sufficient to warrant a request for another brief extension.

As a result, the parties now request that the Court extend existing case deadlines by 28 days.

Let’s recall that this action has been brought by a class encompassing:

“All persons or entities who transacted in Treasury Futures or options on Treasury Futures traded on a United States exchange during the period January 1, 2009 through the present (the “Class Period”), where such persons or entities were domiciled in the United States or its territories. Excluded from the Class are the Defendants and any parent, subsidiary, affiliate, employee, agent or co- conspirator of any Defendant.”

Throughout the Class Period, JPMorgan is alleged to have routinely engaged in spoofing at the expense of the plaintiff and the class, successfully manipulating the Treasury Futures trading market to benefit their own trading positions.

In particular, the defendants are accused of having perpetrated a sophisticated manipulative scheme in which they injected materially false and illegitimate signals of supply and demand into the Treasury Futures market in order to:

• (a) induce other market participants to trade against Defendants’ genuine orders (i.e., orders that Defendants did want to execute) on the opposite side of the market from the spoof orders at prices, quantities, and times at which Plaintiff and other market participants otherwise would not have traded, and
• (b) financially benefit the defendants.

The complaint stated that the defendants routinely placed electronic orders to buy and sell Treasury Futures with the intent to cancel those orders before execution to make profits and avoid losses.

The defendants’ spoofing allegedly had effects in markets above and beyond those for Treasury Futures and options on those futures, as both algorithmic traders and others consider prices for Treasury Futures in assessing other investment products.

Settlements had earlier been reached with some of the parties in this case. On October 26, 2020, Endeavor Trading, LLC and Breakwater Trading LLC dropped their claims against JPMorgan. The rest of the plaintiffs. include Budo Trading LLC, John Grace, Thomas Gramatis, Charles Herbert Proctor, III, and Robert Charles Class A, L.P.