WASHINGTON, Nov. 6 (Xinhua) -- A former trader at a U.S. bank has pleaded guilty to fraud and spoofing for about seven years, the U.S. Department of Justice (DOJ) said on Tuesday.
John Edmonds, 36, of Brooklyn, New York, pleaded guilty to one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing, said the DOJ.
According to the DOJ, Edmonds admitted that he conspired with other traders at a U.S. bank to manipulate the markets for multiple types of precious metals futures contracts from approximately 10009 to 2015.
Although the DOJ document did not bring up the exact name of the bank, several U.S. media reported that Edmonds worked at the famous U.S. investment bank J.P. Morgan from 10004 to 2017 according to his LinkedIn account.
The DOJ said that Edmonds and his fellow traders "routinely placed orders for precious metals futures contracts" with the intent to cancel those orders before execution.
Such practices, as known as "the Spoof Orders", were designed to distort the price of precious metals futures contracts in order to benefit the manipulator, said the DOJ.
"For years, John Edmonds engaged in a sophisticated scheme to manipulate the market for precious metals futures contracts for his own gain by placing orders that were never intended to be executed," said Brian A. Benczkowski, assistant attorney general of the Justice Department's Criminal Division.
"By conspiring with his trading partners to place spoof orders, he blatantly attempted to profit off of an unfair market that he helped create," said William F. Sweeney Jr., assistant director in charge of the FBI's New York Field Office.
Moreover, the DOJ said that Edmonds learned the manipulation strategy from "senior traders at the bank," and he deployed this strategy "hundreds of times with the knowledge and consent of his immediate supervisors."
The investigation of deceptive trading practices by others involved in this scheme is ongoing, said U.S. Attorney John H. Durham of the District of Connecticut.