Spoofing Gold Price ‘Common’ at Bear Stearns, Ex-Trader Says
- Jury told of market manipulation before JPMorgan merger
- Three ex-precious metals employees on trial for fraud
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At Bear Stearns Cos., before the bank was acquired by JPMorgan Chase & Co. in 2008, manipulating the gold futures market with bogus spoof orders was “common practice,” especially for its top trader, Gregg Smith, a former colleague told jurors in Chicago.
“It was pretty widespread” on the precious-metals trading desk, said Corey Flaum, a gold and silver trader who was later fired for spoofing and reached a criminal plea agreement to cooperate with prosecutors. “It was done out in the open,” Flaum said Monday. “Nobody ever said boo about doing it. No one ever said it was legal or illegal. It was common practice.”