The start of the trial of former JPMorgan traders accused of spoofing has been shifted until July 2022.

The Honorable Edmond E. Chang of the Illinois Northern District Court on Thursday set the jury trial for all four defendants – Gregg Smith, Michael Nowak, Christopher Jordan, and Jeffrey Ruffo, for July 5, 2022.

The Court will set aside, for now, six weeks, which runs through August 12, 2020. But the Court will set time limits (expandable on good cause) after the pretrial conference, which might very well reduce the trial to five weeks. This timing accommodates the Court’s and the lawyers’ trial calendars, while being far enough out that there is a reduced risk of another pandemic-caused continuance.

The Court considered but rejected again the proposal to split the trials into two, given the strong interest in a joint trial.

Let’s recall that this prosecution arises out of an alleged commodities-spoofing conspiracy perpetrated by precious-metals traders. The superseding indictment charges a conspiracy to commit racketeering activity, as well as substantive counts of fraud, spoofing, and attempted price manipulation.

On August 17, 2021, Judge Edmond E. Chang of the Illinois Northern District Court, issued a Memorandum & Opinion axing the bank fraud charges against the defendants.

Regarding the bank fraud charges, the government had proposed the so-called risk-of-loss theory. The judge noted that it is generally true that exposing a bank to a risk of loss might very well qualify as bank fraud, so long as the defendant intended to defraud the bank and schemed to do so.

But in this case, the Judge said, this theory is presented in all of one sentence in the government’s response brief and, more importantly, is not alleged at all in the indictment. In the one sentence proffering this theory, the government’s response does not actually cite to a specific allegation in the indictment. “There is simply no way that the defense could have been on notice of this theory of bank fraud,” the Judge concludes.

Indeed, the risk-of-loss theory as to JPMorgan, according to the Judge, is not only absent from the indictment, but the theory is actually inconsistent with the allegations in the indictment. The indictment charges the defendants (three of them), which requires the intent to defraud a bank.

But nothing about the risk-of-loss theory sets forth a misrepresentation (or omission) made to JPMorgan. Instead, the indictment alleges that that the purpose of the conspiracy was, in part, to maximize the bank’s profits and minimize its losses.

For these reasons, the bank fraud counts (Counts 5 through 7) were dismissed. With the dismissal in place, those counts also cannot serve as predicate offenses for the RICO or conspiracy charges, the Judge said.