Court approves $15.7M settlement in JPMorgan treasury futures spoofing case

A lawsuit accusing JPMorgan of spoofing the market for U.S. Treasury futures contracts is inching closer to its end, as the Court has preliminarily approved the proposed settlement between the defendant and several plaintiffs.

On December 9, 2021, Judge Paul A. Engelmayer of the New York Southern District Court signed an order for the preliminary approval of the $15.7 million settlement agreed among JPMorgan Chase & Co., J.P. Morgan Clearing Corp. (now known as J.P. Morgan Securities LLC), J.P. Morgan Securities LLC, and J.P. Morgan Futures, Inc. (now known as J.P. Morgan Securities LLC) and the following plaintiffs: Charles Herbert Proctor, III, Synova Asset Management, LLC, Robert Charles Class A, L.P., Thomas Gramatis, Budo Trading LLC, Kohl Trading LLC, M & N Trading L.L.C., Port 22 LLC, and Rock Capital Markets LLC.

The Court found that the Settlement was entered into at arm’s-length by experienced counsel and is sufficiently within the range of reasonableness, fairness, and adequacy, and that notice of the Settlement should be given as provided in this Order because the Court will likely be able to approve the Settlement under Rule 23(e)(2) of the Federal Rules of Civil Procedure. The terms of the Distribution Plan, the Supplemental Agreement, and the Proof of Claim and Release also are preliminarily approved as within the range of reasonableness, fairness, and adequacy.

Let’s recall that this is a class action alleging JPMorgan violated the Commodity Exchange Act, 7 U.S.C. §§ 1 et. seq. (CEA), and the common law by intentionally manipulating the prices of U.S. Treasury futures contracts and options on those contracts traded on United States-based exchanges from April 1, 2008 through January 31, 2016.

Specifically, the plaintiffs alleged that JPMorgan utilized a manipulative technique called “spoofing,” which involved purposefully placing orders with the intent to cancel prior to execution to send false and illegitimate supply and demand signals to an otherwise efficient market.

A hearing will be held on March 4, 2022 to consider the fairness, reasonableness, and adequacy of the settlement.