JPMorgan executives tasked with managing the bank’s precious metal investing are now the target of an extremely aggressive investigation in which some of these executives are being charged under RICO. Federal prosecutors agreed that the move was aggressive and rarely used in banking conspiracy cases, but also noted that the alleged price-fixing and racketeering occurred over eight years. JPMorgan pleaded guilty to price-fixing and the major players, at least the ones who were caught, now face serious criminal charges.
Prosecutors also allege that Michael Nowak, the main player in the federal investigation, ripped off market participants and clients in order to control the prices of gold, platinum, silver, and palladium. Two other traders were charged, as well.
The three men are accused of the highly-illegal tactic of spoofing. Spoofing essentially floods the market with fake trades that are then pulled at the last moment. The more activity, the more interest in the stock or metal, the more you can bump or drop the price of the asset. The men are accused of placing trades with floor traders as well as placing the illegal trades themselves.
The men were said to have made millions themselves while costing partners, clients, and other market participants millions. The trades themselves date back to before 2011, the first time anti-spoofing legislation made the practice illegal. But federal prosecutors insist that the trades continued until the men were caught in 2015.
Understanding RICO Prosecutions
RICO (Racketeer Influenced and Corrupt Organizations Act) laws enable the federal government to streamline the prosecution against criminal enterprises. The ‘R’ in RICO stands for racketeer, which is a nebulous term you will find applied to mob bosses, gangs, and sometimes even Chicago Alderman. It has recently been applied to pharmaceutical company executives in relation to the opioid crisis, and now again to illegal coordinate efforts to conduct illegal trades. But what exactly is ‘racketeering’?
Racketeering is simply the conducting of illegal business for profit or engaging in a fraudulent scheme or enterprise. Since it is so open-ended, it can apply to drug dealers, corrupt business practices, and illegal trading. So long as any crime can be associated with ‘an enterprise,’ the crime can be prosecuted under the RICO act.
Even though the RICO act allows those involved in ventures together to be prosecuted for one another’s crimes, an essential element of a successful RICO prosecution requires federal prosecutors prove what each individual did or did not know.
To be prosecuted under RICO, the prosecution must show that you individually committed “two or more acts” that qualify as racketeering activity. There are 27 such federal crimes. The acts generally need to be related to a single venture or enterprise.
Talk to a Chicago Criminal Defense Attorney
If you have been charged under RICO, you need an attorney who understands the often-complicated prosecutions of RICO defendants. David Freidberg has handled several RICO cases and he can help you defend yourself from the charges. Call us today at (312) 560-7100 or contact us online for more information.