A group of traders from across the U.S. who allege that J. P. Morgan Chase manipulated precious metals markets for years are one step closer to bringing a class action suit against the nation's largest bank.
Earlier this month, a federal judge said five separate lawsuits making similar allegations against the bank could be combined, potentially including thousands of people who traded in the precious metals market from Jan. 2009 through Dec. 2015.
Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a "related criminal case" that involves alleged market manipulation by precious metals traders at J. P. Morgan.
J. P. Morgan declined to comment on this story.
Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.
Vincent Briganti, a partner at the firm, filed the first suit seeking class action status in November on behalf of Dominick Cognata, a trader who alleges he suffered losses due to J.P. Morgan's illegal trading conduct in the silver and gold futures and options markets.
That was after the federal court in Connecticut unsealed a criminal plea agreement by John Edmonds, a former J.P. Morgan metals trader. In his guilty plea, Edmonds, who is 36-years old, admitted that he and other "unnamed co-conspirators" fraudulently manipulated the precious metals markets while they were employed at J. P. Morgan from 2009 to 2015.
Edmonds said he had learned the illegal trading tactics from senior traders, and then used them hundreds of times with the knowledge of and consent of his immediate supervisors.
Briganti's lawsuit also names John Edmonds and a group of yet-to-be-identified precious metals traders and the bank as defendants.
On Wednesday, the lawyers sent a letter to Judge Koeltl saying they were having difficulty locating Edmonds to serve him legal papers and requested a 30-day extension to do so, which the judge granted on Thursday. Briganti noted that they have been in contact with Edmonds' attorney in the criminal case. Edmonds' attorney and Briganti could not be reached for comment.
"We are hopeful that this extension will result in completing service on Mr. Edmonds without formal motion practice and a request for alternative means of service," Briganti said in the letter.
The next step in the civil case is for the plaintiffs to file an amended class action complaint and set a schedule for defendants to respond.
In addition to the proposed class action, J. P. Morgan also faces a separate civil suit which also accuses the bank of rigging precious metals markets.