(Bloomberg) — Michael Nowak, the person who led the extremely worthwhile JPMorgan Chase & Co. precious-metals desk, isn’t the cheater and criminal that federal prosecutors painted him out to be in an enormous market-rigging case in opposition to him and two others, his lawyer informed a jury in Chicago.

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Prosecutors relied on dangerous proof and doubtful witnesses to assist their idea that Nowak led a racketeering enterprise, protection lawyer David Meister stated. Testimony throughout a three-week trial confirmed one thing very totally different, revealing Nowak was an knowledgeable dealer and chief who inspired his crew and brazenly labored with financial institution compliance officers to stamp out so-called spoofing orders on his desk, the lawyer stated.

“Mike just isn’t a prison mastermind from the federal government’s narrative,” Meister stated throughout closing arguments Friday.

The protection statements come a day after the prosecution wrapped up its case accusing Nowak, high dealer Gregg Smith and salesman Jeffrey Ruffo of working collectively on the world’s greatest financial institution to earn income for the precious-metals desk by manipulating markets from 2008 to 2016.

Prosecutors claimed Thursday that Nowak was the “boss” of the conspiracy to make use of bogus purchase and promote orders that he and others rapidly canceled and by no means meant to commerce to push costs within the path they wished.

Nowak and Smith are charged with racketeering conspiracy in addition to conspiring to commit worth manipulation, wire fraud, commodities fraud and spoofing. Ruffo is charged with racketeering and conspiracy. They face years in jail if convicted, and the case is the most important up to now within the US authorities crackdown on market manipulation because the monetary disaster.

‘Worst Spoofer’

Meister, on Friday, stated the protection crew’s evaluation of 100 totally different situations of spoofing alleged by the federal government confirmed that Nowak’s huge, scaled orders have been executed about 25% of the time.

“If he was actually meaning to keep away from execution on a regular basis, that stat would make him simply in regards to the worst spoofer on this planet,” Meister stated.

Legal professionals for all three defendants attacked the credibility of two junior members of the JPMorgan crew who testified for the federal government. Christian Trunz and John Edmonds, who’ve already pleaded responsible, described how the financial institution’s precious-metals desk used the technique for years. The protection attorneys stated Trunz and Edmonds had an incentive to inform the prosecutors what they wished to listen to, in order to keep away from jail.

Ruffo’s lawyer, Bethany Biesenthal, stated it’s not a criminal offense to be a very good salesperson or for her shopper to have sat subsequent to Smith and belief in his buying and selling methods. She additionally requested jurors to think about the witnesses the federal government by no means known as to the stand: together with different JPMorgan gross sales employees, the hedge fund shoppers, financial institution compliance officers. Why didn’t they try this, she requested.

“The conspiracy didn’t really exist,” Biesenthal stated. “There must be actual laborious proof. It didn’t exist simply because they are saying it did. They’ve obtained to indicate it to you.”

On Thursday, the lawyer for Smith stated his shopper’s alleged spoof orders have been reputable, and that there are different explanations for getting into giant orders to purchase and promote futures contracts on the similar time on behalf of shoppers. Spoof trades are purchase or promote orders positioned and rapidly canceled, with the dealer having no intention of executing them.

‘Conspiracy Occurred’

In an hour-long rebuttal, federal prosecutor Avi Perry pushed again in opposition to protection claims that the whole case was a arrange by the federal government — constructed by way of cherry picked buying and selling information and compelled confessions from former merchants who beforehand pleaded responsible.

“Solely one among two issues occurred right here,” Perry stated. “Both the federal government strong-armed three harmless males into pleading responsible and we spoon fed them particular lies and particular phrases to say on the stand. Both that occurred or this conspiracy occurred.”

In a direct response to Meister’s earlier argument that Nowak dedicated no crimes, Perry identified that in his time operating the desk, 4 of his merchants have been accused of spoofing the market. The prosecutor stated Nowak spoofed the markets and lied to regulators.

Perry additionally reminded the jury of the dialog Trunz testified about, between the junior dealer and Nowak shortly after they discovered that Edmonds had pleaded responsible and was cooperating with prosecutors. Trunz stated Nowak coached him to not cooperate.

“They stated he doesn’t seem to be some racketeer,” Perry stated. “You realize what a racketeer boss says: ‘you’re not going to plea are you’. That’s who Mike Novak is.”

Jurors started their deliberations late Friday afternoon and are scheduled to renew on Monday morning.

The case is US v. Smith et al, 19-cr-00669, US District Court docket, Northern District of Illinois (Chicago)

(Updates with prosecution statements.)

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