UPDATE: Federal Court Sentences Former J.P. Morgan Chase Traders to Prison

On August 22, 2023, Judge Edmond E. Chang sentenced two former precious metals traders at J.P. Morgan Chase for their role in a market manipulation scheme involving tens of thousands of unlawful trading sequences over an eight-year period, resulting in over $10 million in market losses.  The U.S. Department of Justice (DOJ) noted in its August 22, 2023, press release:

“Gregg Smith, 59, of Scarsdale, New York, was sentenced to two years in prison and a $50,000 fine. Michael Nowak, 49, of Montclair, New Jersey, was sentenced to one year and one day in prison and a $35,000 fine.”

In connection with its investigation and prosecution of the Defendants, the DOJ hired Monument Economics Group to analyze extensive CME Group precious metals market trading data.  The MEG Data Analytics team, led by Adrienne Sexton, assisted in identifying trading patterns, creating trial exhibits showing snapshots of the Defendants’ trading, assisting in the calculation of summary statistics presented at trial, supporting the DOJ trial team along with two of its witnesses, and assisting in the calculation of losses suffered by market participants.  Judge Chang referenced trial evidence that MEG assisted with in his August 21, 2023 Order concerning the loss-amount calculations related to the sentencing guidelines:

“[T]he evidence at trial demonstrated repeatedly, when the Defendants placed large, visible orders that created an imbalance with the opposite [side] of the market, frequently the price was pushed to the opposite side – thus filling the orders that the Defendants wanted to fill. The Defendants then cancelled (almost always successfully) the large-side orders. The jury found beyond a reasonable doubt (and the Court agrees with the finding) that the large-side orders were in reality placed with the unconditional intent to cancel them, because the Defendants entered the orders to trick the market into believing that there was a genuine supply or demand represented by the orders—that is, the spoof orders.”

Judge Chang further referenced the trial-evidence sequences MEG assisted with which showed the “super-fast-cancellation clicking that formed the core (and the most colorful part) of the trial evidence of Spoof Orders.”










Dr. Paul Kent is Major Contributor to the Bureau of Transportation Statistics Annual Transportation Statistics Report

Earlier this year the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) issued its 2022 edition of its Transportation Statistics Annual Report. By legislative mandate, BTS is required to address the state of the U.S. transportation system, freight logistics, transportation economics, safety, energy and sustainability, and the state of transportation statistics. COVID-19’s effects on transport modes are covered throughout the report.

Dr. Paul Kent, Monument’s Port and Logistics expert, was the main contributor for the Annual Report’s Chapter 3 — Freight and Supply Chain. Using BTS data, he showed that U.S. East Coast Asian container volumes for the first time exceeded U.S. West Coast Asian freight volumes in 2021, likely due to improved U.S. East Coast connectivity to liner shipping networks, enabling the diversion of some Asian trade volumes from the U.S. West Coast to U.S. East Coast ports. Among Chapter 3’s other highlights:

  • Nearly 40% of the U.S. gross output in 2020 (valued at about $12.22 trillion) relied on the Nation’s transportation and logistics sector, itself contributing an output of $565 billion;
  • In terms of freight value, John F. Kennedy International Airport and Chicago airports were ranked as 2020’s top two international freight gateways, with the U.S.-Mexico land border post in Laredo and the Port of Los Angeles ranked 3rd and 4th, respectively;
  • Trucks transported 12 billion tons in 2019, or 67 percent of total domestic freight volume — about 10 times more than that of rail, the United States’ third-ranked mode by freight volume;
  • Substantial foreign direct investment in Mexico in 2022, particularly from the nearshoring of U.S. companies, will likely mean an increase in cross border trade flows, with trucking continuing its modal dominance and a shifting of some freight flows from U.S. coastal ports to the U.S.-Mexico border.

Dr. Kent’s chapter can be read here. The entire report is available at https://www.bts.gov/tsar. Also, BTS provides an impressive range of transportation statistics for all transport modes online (https://data.bts.gov/). Data addressing COVID-19’s impact on freight transport are available here: https://lnkd.in/esBJ-JqD

Verizon Employees Win Class Certification in ERISA Action

On Tuesday, U.S. District Judge Paul G. Gardephe certified a class of participants in Verizon’s 401(k) Plan pursuant to the Employee Retirement Income Security Act (“ERISA”), finding that Plaintiff Melina N. Jacobs has standing by virtue of her indirect investment in the Global Opportunity Fund through the Plan’s Target Date Funds. Verizon challenged her standing, saying she had no direct investment and did not demonstrate a loss. However, the Court disagreed, saying that it was sufficient that she realized “a more modest gain” by virtue of the inclusion of the Global Opportunity Fund in the Plan’s Target Date Funds.