JPMorgan fined for "wash trades" in oil, gasoline

Fri Jun 1, 2012 11:12am EDT
 
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(Reuters) - JPMorgan executed 'wash trades' on 10 separate occasions in U.S. crude oil and gasoline futures in the first half of last year in an effort to manage position limits, CME Group said in a disciplinary notice on Friday.

CME, which operates the New York Mercantile Exchange, ordered JPMorgan to pay a fine of $30,000.

"On 10 separate occasions between January 1, 2011, and June 30, 2011, in an effort to manage position limits, traders employed by JPM executed block trades between separate legal entities with the same beneficial owner in WTI or Gasoline during the last three days prior to expiration of the particular contract," the notice said, referring to West Texas Intermediate (WTI), the main U.S. crude oil future.

"The (NYMEX Business Conduct Committee) Panel also found that in each of these 10 instances, the trader was the sole decision maker for both the buy and sell side of the trade."

As part of the settlement, JPMorgan "neither admitted nor denied the rule violations," the notice said.

(Reporting By David Sheppard; Editing by Phil Berlowitz)

 
Commuters are reflected in stone as they walk past the JP Morgan headquarters in New York, May 17, 2012. REUTERS/Eduardo Munoz