LBMA removes JPMorgan board member after indictment

The London Bullion Market Association has removed Michael Nowak, JPMorgan’s head of precious metals trading, from its board after he was indicted by the US Department of Justice for a “massive, multiyear scheme” to manipulate the precious metals markets.

“In light of the ongoing investigation by the Department of Justice, the LBMA, under the terms of its Articles of Association, has removed Mr Nowak from its board,” the LBMA said.

The DoJ indictment is an embarrassment for the LBMA, which represents London’s precious metals market, and launched a code of conduct for its members in 2017.

Mr Nowak’s name was no longer listed on the LBMA’s website as of Friday.

JPMorgan, along with HSBC, dominates gold trading in London and is one of the most powerful members of the LBMA.

Mr Nowak was charged on Monday along with two colleagues, Gregg Smith and Christopher Jordan, on federal racketeering charges normally used to take down organised crime syndicates.

The indictment alleged that the three traders engaged in “widespread spoofing, market manipulation and fraud”.

They placed 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”, it alleged.

Mr Nowak and Mr Smith are on leave from JPMorgan, according to a person familiar with the matter, while Mr Jordan has left the bank.

The DoJ is also looking at other commodities and other banks, according to a person familiar with the matter.

JPMorgan is also one of the biggest traders of base metals such as aluminium.

A spokesman for JPMorgan declined to comment.