The lawsuit brought by the Commodity Futures Trading Commission (CFTC) against former JPMorgan precious metals traders Michael Nowak and Gregg Smith has come to an end.

On December 22, 2025, the Honorable Franklin U. Valderrama of the Illinois Northern District Court entered consent judgments in this case.

Defendant Smith will have to pay a civil monetary penalty in the amount of two hundred thousand dollars ($200,000).

Smith is permanently restrained, enjoined and prohibited from directly or indirectly engaging in trading, practices, or conduct on or subject to the rules of a registered entity that is, is of the character of, or is commonly known as “spoofing” (bidding or offering with the intent to cancel the bid or offer before execution), in violation of Section 4c(a)(5)(C) of the Act, 7 U.S.C. § 6c(a)(5)(C).

Smith is also restrained, enjoined, and prohibited, for a period of three years from the date of entry of the consent order, from directly or indirectly:

1. Trading on or subject to the rules of any registered entity (as that term is defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40));
2. Entering into any transactions involving “commodity interests” for his own personal accounts or for any account in which he has a direct or indirect interest;
3. Having any commodity interests traded on his behalf;
4. Controlling or directing the trading for or on behalf of any other person or entity, whether by power of attorney or otherwise, in any account involving commodity interests;
5. Soliciting, receiving or accepting any funds from any person for the purpose of purchasing or selling any commodity interests;
6. Applying for registration or claiming exemption from registration with the Commission in any capacity, and engaging in any activity requiring such registration or exemption from registration with the Commission, except as provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2024); and/or
7. Acting as a principal, agent or any other officer or employee of any person, registered, exempted from registration or required to be registered with the Commission except as provided for in 17 C.F.R. § 4.14(a)(9) (2024).

To effect resolution of all charges in the Complaint, the parties agree and the Court directs that Counts II and III of the Complaint be dismissed with prejudice.

Defendant Nowak will have to pay a civil monetary penalty in the amount of one hundred fifty thousand dollars ($150,000).

Nowak is permanently restrained, enjoined and prohibited from directly or indirectly engaging in trading, practices, or conduct on or subject to the rules of a registered entity that is, is of the character of, or is commonly known as “spoofing” (bidding or offering with the intent to cancel the bid or offer before execution), in violation of Section 4c(a)(5)(C) of the Act, 7 U.S.C. § 6c(a)(5)(C).

Nowak is also restrained, enjoined, and prohibited, for a period of six months from the date of entry of this consent order, from directly or indirectly:

1. Trading on or subject to the rules of any registered entity (as that term is defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40));
2. Entering into any transactions involving “commodity interests” for his own personal accounts or for any account in which he has a direct or indirect interest;
3. Having any commodity interests traded on his behalf;
4. Controlling or directing the trading for or on behalf of any other person or entity, whether by power of attorney or otherwise, in any account involving commodity interests;
5. Soliciting, receiving or accepting any funds from any person for the purpose of purchasing or selling any commodity interests;
6. Applying for registration or claiming exemption from registration with the Commission in any capacity, and engaging in any activity requiring such registration or exemption from registration with the Commission, except as provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2024); and/or
7. Acting as a principal, agent or any other officer or employee of any person, registered, exempted from registration or required to be registered with the Commission except as provided for in 17 C.F.R. § 4.14(a)(9) (2024).

To effect resolution of all charges in the Complaint, the parties agree and the Court directs that Counts II and III of the Complaint be dismissed with prejudice.

Let’s recall that the CFTC filed a civil enforcement action in the U.S. District Court for the Northern District of Illinois against Michael Nowak and Gregg Smith back in September 2019. The regulator charged the defendants with spoofing, engaging in a manipulative and deceptive scheme, and attempting to manipulate prices in the precious metals futures markets while employed at JPMorgan.

The CFTC complaint alleged that beginning in at least 2008 and continuing through at least 2015, while placing orders for and trading precious metals futures contracts on CME Group Inc.’s exchanges, Nowak and Smith repeatedly engaged in manipulative or deceptive acts and practices by spoofing (bidding or offering with the intent to cancel the bid or offer before execution). The defendants allegedly placed thousands of orders with the intention to cancel them in order to send false signals of increased buying or selling interest designed to trick market participants into executing the orders the defendants wanted filled.

The complaint also alleged that the defendants engaged in spoofing with the intent to manipulate market prices and create artificial prices, and thereby enable their orders to be filled sooner, at a better price, or in larger quantities than they otherwise would.

According to the complaint, the defendants were aware other traders at the bank were also spoofing, and Smith taught other traders at the bank how to spoof.