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On Spoofing B of A & Morgan Stanley Move To Dismiss Case in SDNY As JPM & Others Pend

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SDNY COURTHOUSE, Feb 24 – In the shadow of the US Department of Justice actions on (some of) JPMorgan Chase's U.S. Treasury "spoofing" fraud, on August 13 U.S. District Court for the Southern District of New York Judge Paul A. Engelmayer held a proceeding in  Breakwater Trading LLC v. JPMorgan Chase & Co. et al.

Inner City Press live tweeted it - then added some analysis, on Patreon here.

 Now also on spoofing, on February 24 SDNY Judge Lewis J. Liman heard Bank of America's and Morgan Stanley's motions to dismiss claims about spoofing in metals trading. Inner City Press live tweeted it here:

Bank of America's lawyer Richard Schwed says there were public spoofing claims against at least 10 big banks, about four metal - so the plaintiffs were on "inquiry notice." ... 

Judge Liman: It is your proposition that the allegations here don't make out manipulation? BofA's lawyer: That's it. There was a lot of discussion, pre Dodd Frank, about spoofing. It was always viewed as separate and apart from manipulation.

 BofA's lawyer quotes a decision on spoofing by SDNY Judge Valerie E. Caproni.

Now Morgan Stanley's lawyer Jonathan Marcus: There's no private cause of action, so they try price manipulation. But there's no information in the Complaint about the changes in price.

 Plaintiffs' counsel: The defendants bear the burden on statute of limitations. Here, it only began to run when plaintiffs are put on inquiry notice. Judge Liman: What cases do you have on that?

Plaintiffs' counsel: There's Judge Marrero's decision in  Hinds County

 There is. We'll stay on this.

On November 30, Judge Engelmayer had another proceeding in the case, and inquired into the basis of the request to put the case into "Power Save Mode," and what value added plaintiffs' counsel brought to the table. As the response such as it was was being given, another person burst into the call and was admonished.  Inner City Press will continue to cover this case.

On September 29, "The Commodity Futures Trading Commission today issued an order filing and settling charges against JPMorgan Chase & Company (JPMC & Co.) and its subsidiaries, JPMorgan Chase Bank, N.A., and J.P. Morgan Securities LLC (JPMS) (collectively, JPM), for manipulative and deceptive conduct and spoofing that spanned at least eight years and involved hundreds of thousands of spoof orders in precious metals and U.S. Treasury futures contracts on the Commodity Exchange, Inc., the New York Mercantile Exchange, and the Chicago Board of Trade. This case is brought in connection with the Division of Enforcement’s Spoofing Task Force. The order finds that JPM’s illegal trading significantly benefited JPM and harmed other market participants. JPM is required to pay a total of $920.2 million—the largest amount of monetary relief ever imposed by the CFTC—including the highest restitution ($311,737,008), disgorgement ($172,034,790), and civil monetary penalty ($436,431,811) amounts in any spoofing case."

Judge Engelmayer is asking of the links of this civil case filed in May to criminal cases.

 A lawyer tells Judge Engelmayer she spoke with "Mr Sullivan of the DOJ" about the relation of the criminal case and this.

 Judge Engelmayer: Interim lead counsel should discuss the schedule of discovery as relates to any DOJ request... Since Ms. Nussbaum spoke with the relevant figure at DOJ, you all should. [It's Linda P. Nussbaum representing Breakwater Trading LLC] 

Judge Engelmayer: There's reference to a protective order - you should discuss that too. W have a missing party here in the room, a missing entity, the DOJ, and they'll have something to say about discovery in this case... I had an ex parte though fully memorialized under seal discussion with DOJ [More on Patreon here.]

Another lawyer: I speak with Mr. Perry and Mr. Sullivan at the DOJ, often... 

Ms. Nussbaum: We'll reach out to other counsel. We've had discussions with Ms. Davidoff [Amanda Flug Davidoff representing JP Morgan Clearing Corp.] 

Judge Engelmayer: we are adjourned.

The case is now In re JPMorgan Treasury Futures Spoofing Litig., 20-cv-03515 (Engelmayer)


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