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JPMorgan Chase & Co. must face a suit from a former trader who claims he was fired for cooperating with US prosecutors probing illegal spoof trades at the bank’s precious-metals trading business, a federal judge in New York ruled.
Donald Turnbull was fired in 2019, at a time when the bank also was cooperating with the government probe. JPMorgan, the largest US bank, agreed in 2020 to pay more than $920 million to resolve government claims that its trading desks were spoofing markets in precious metals and treasuries.
US District Judge John G. Koeltl rejected JPMorgan’s request to dismiss the lawsuit in a ruling dated Monday.
The judge said Turnbull’s claim that he was fired just 24 days after an interview in which JPMorgan learned he had told US Justice Department investigators about “severe, chronic institutional failures” at the bank “strongly suggests that the plaintiff’s protected activity contributed to his termination.”
JPMorgan declined to comment on the ruling.
Turnbull claims JPMorgan told him he was being fired over 14 trading sequences that could be considered spoofing. Meanwhile, other traders — including one who was later indicted for 38,146 spoofing sequences — weren’t fired until criminal charges against them became public. According to Turnbull, that shows the real motivation for his firing was to discredit him.
Koeltl threw out Turnbull’s initial lawsuit in March, but allowed the former trader to file an amended complaint. The judge ruled that the new complaint is “plausible on its face,” a decision that allows both sides to go forward with evidence gathering.
The US Justice Department has been cracking down on market manipulation cases during the past decade, which has led to settlements with several banks and criminal cases against their employees.
In August, the former head of the JPMorgan’s precious-metals business, Michael Nowak, and his top trader, Gregg Smith, were found guilty of fraud and other charges by a jury in Chicago.
The case is Turnbull v. JPMorgan Chase, 21-cv-3217, US District Court, Southern District of New York (Manhattan).
(By Steve Stroth and Bob Van Voris)
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