CFTC Wraps Up JPMorgan Precious Metals Spoofing Saga later than Six Years

How Did the CFTC Case Against Nowak and Smith End?

The Commodity Futures Trading Commission has brought to a close its civil enforcement action against former JPMorgan precious-metals traders Michael Nowak and Gregg Smith, ending one of the longest-running spoofing cases tied to Wall Street’s metals desks.

On December 22, 2025, U.S. District Judge Franklin U. Valderrama of the Northern District of Illinois entered consent judgments resolving the regulator’s claims, more than six years later than the lawsuit was first filed. The settlements fully conclude the CFTC’s civil action against both defendants.

Under the terms of the judgment, Smith agreed to pay a $200,000 civil monetary penalty. He is permanently restrained from engaging in spoofing or any conduct barred under Section 4c(a)(5)(C) of the Commodity platform Act, which prohibits bidding or offering with the intent to cancel before execution. Smith is also barred for three years from trading on or subject to the rules of any registered entity, trading commodity interests for his own or others’ accounts, directing trading activity, soliciting funds, or viewking registration with the CFTC.

Nowak, who previously served as JPMorgan’s global head of precious-metals trading, agreed to pay a $150,000 civil penalty. He is subject to a permanent injunction against spoofing and faces a six-month ban on trading commodity interests, directing trading activity, soliciting funds, or engaging in any activity requiring CFTC registration.

As part of the reanswer, the parties agreed to dismiss Counts II and III of the complaint with prejudice, bringing the civil case to a formal close.

Investor Takeaway

What Was the CFTC Alleging in the Metals Spoofing Case?

The CFTC first filed its lawsuit in September 2019, alleging that Nowak and Smith engaged in a years-long scheme to manipulate precious-metals futures prices while employed at JPMorgan. The alleged misconduct spanned at least 2008 through 2015 and involved trading on futures platforms operated by CME Group.

According to the complaint, the traders placed thousands of large orders in gold, silver, platinum, and palladium futures with the intent to cancel them before execution. Regulators said the orders were designed to create false signals of , prompting other market participants to trade at prices that benefited the defendants’ genuine orders on the opposite side of the market.

The CFTC alleged that the practice allowed the defendants to obtain fills more rapidly, in greater size, or at prices that would not have been available absent the deceptive conduct. The agency also claimed the activity was not isolated, asserting that the traders were aware spoofing was occurring elsewhere on the desk and that Smith instructed junior traders on how to carry it out.

How Did the Civil Case Fit Into the Broader JPMorgan Investigation?

The civil action unfolded alongside a wider criminal investigation by the into spoofing across precious-metals and U.S. Treasury futures markets. That probe resulted in JPMorgan agreeing to pay $920 million in 2020 to resolve criminal charges related to metals and Treasury market manipulation.

Several former JPMorgan traders were later convicted in criminal proceedings. Trial evidence included internal communications that portrayed spoofing as a routine tactic on certain trading desks during the period under investigation.

While the DOJ cases focused on criminal liability, the CFTC’s action targeted civil violations of the Commodity platform Act. The regulator sought penalties and market-access restrictions rather than prison sentences, aiming to limit future misconduct by barring individuals from regulated markets.

Investor Takeaway

Why Does the Reanswer Matter for Metals Markets?

Although the fines imposed on Nowak and Smith are small compared with earlier corporate settlements, the consent judgments carry lasting consequences. Permanent injunctions against spoofing, coupled with , block both men from returning to roles that fall under CFTC oversight.

The outcome also reflects how spoofing enforcement has matured since the financial crisis. Regulators now rely heavily on detailed order-book data, pattern analysis, and established court precedents, reducing the need for extended trials in many cases.

For futures markets, the reanswer closes a chapter that shaped compliance practices across the industry. Over the past decade, banks and platforms have tightened supervision, expanded surveillance tools, and increased scrutiny of high-frequency order behavior in response to spoofing cases like this one.

With the Nowak and Smith matter resolved, the CFTC appears to be drawing a line under one of the most prominent civil enforcement actions to emerge from the post-crisis crackdown on metals market manipulation.