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Prosecutors ask for delays in civil cases against JP Morgan as criminal probe into metals market manipulation continues

Key Points
  • The civil cases pending in federal court in New York City were already on hold until May 31.
  • Prosecutors had warned judges that allowing the cases to go forward would interfere with their investigation of alleged market manipulation by precious metals traders at the nation's largest bank.
  • On Friday, they were granted an additional five-month postponement of proceedings in one of the two lawsuits.
People pass a sign for JPMorgan Chase at it's headquarters in Manhattan, New York City.
Spencer Platt | Getty Images

Federal prosecutors, citing an ongoing criminal probe into manipulation of precious metals markets, on Friday were granted an additional five-month postponement of proceedings in one of two civil lawsuits that accuse J.P. Morgan Chase of such misconduct.

The cases pending in federal court in New York City were already on hold until May 31. Prosecutors had warned judges earlier this year that allowing the cases to go forward, which would include depositions of witnesses, would interfere with their investigation of alleged market manipulation by precious metals traders at the nation's largest bank. In its latest request for further delay in both cases, the U.S. Justice Department said that prosecutors have been "diligently" pursuing their probe since the original postponements were previously put in place.

On Friday, the judge overseeing a proposed class action, John Koeltl, granted the request to pause proceedings through Oct. 31. The judge overseeing the other suit, Paul Engelmayer, has not responded yet to the prosecutors' request for a similar delay in that case.

The criminal investigation is related to conduct already admitted to by former J.P. Morgan trader John Edmonds.

The 37-year-old Manhattan resident pleaded guilty in Connecticut federal court in October to working with other "unnamed co-conspirators" to manipulate the prices of gold, silver, platinum and palladium futures contracts over a seven-year span while employed at the bank.

Edmonds said in his guilty plea that he learned how to make bogus trade orders from senior traders at the bank — and that he used the strategy hundreds of times with the knowledge and consent of supervisors. That strategy, known as spoofing, involved placing orders in the precious metals futures market to distort the prices while actually never intending to execute the transaction.

Edmonds's sentencing was recently postponed for a second time to December, suggesting he is continuing to cooperate with prosecutors.