A former JPMorgan Chase & Co. commodities trader has filed a lawsuit against the bank for unfair dismissal, claiming he was wrongly accused of spoofing cocoa trades to satisfy regulatory pressures. The case echoes a previous successful lawsuit by another ex-JPMorgan trader, raising questions about the bank’s trading practices and disciplinary procedures.
Phil Remillard, the plaintiff, alleges that JPMorgan adopted a stricter approach to trading activities following a high-profile spoofing scandal that cost the bank $920 million in penalties. Remillard’s claim, filed at a London employment tribunal, mirrors the legal arguments used by his former colleague, Bradley Jones, who won a similar case against JPMorgan and received over £1.6 million ($2 million) in back pay.
Remillard is accused of placing and then canceling cocoa futures trades on 12 occasions in 2018. He denies these allegations, asserting that the bank unfairly shifted the burden of proof onto him and that his dismissal was a way for JPMorgan to demonstrate a tough stance on spoofing to the Department of Justice (DOJ). He maintains that US regulators intensified scrutiny of the bank after the 2015 spoofing scandal, potentially influencing JPMorgan’s internal investigations.
JPMorgan executives, however, contend that Remillard’s trading patterns exhibited clear signs of spoofing, which involves placing orders with the intent to cancel them before execution, creating a false impression of market demand. They argue that their investigation concluded that his actions were likely to mislead the market.
“The impact of my dismissal has been devastating to me and extremely demoralizing,” Remillard stated in his witness testimony. He expressed concerns that he was made a scapegoat to appease the DOJ. While UK tribunals typically cap unfair dismissal awards at £105,700, reinstatement to a former position can lead to significantly higher payouts, as demonstrated by the Jones case.
Remillard highlights similarities between his case and Jones’, noting that some of the same managers involved in Jones’ dismissal were also involved in his own disciplinary process. His case stems from a 2021 internal review of past trading activity that JPMorgan conducted to address concerns about inadequate monitoring. This review flagged Remillard’s 2018 cocoa trades.
Jason Sippel, a global co-head of markets at JPMorgan’s investment bank, testified that Remillard frequently used “iceberg orders,” which conceal the full size of an order from the market. Sippel explained that Remillard would place a large, visible order in one direction, followed by a hidden “iceberg order” in the opposite direction. Remillard would then execute the iceberg order and cancel the visible one, a pattern that Sippel deemed suspicious.
“Some of his trading activity had the classic hallmarks of spoofing,” Sippel stated. “It is unusual to see this pattern of trading because, even if there is a legitimate reason for it, traders are generally very wary of being seen to trade in this way because of the optics.”
Remillard argued that the fast-paced nature of commodities trading, with hundreds of trades executed daily, made it impossible to recall the specific rationale behind each decision years later. He attributed canceled orders to fluctuating market conditions. He also claimed that JPMorgan prematurely assumed guilt unless he could definitively prove his innocence.
The case highlights the volatility of the cocoa market, a relatively small market susceptible to price swings due to its concentrated production in a few equatorial countries. Cocoa prices have experienced significant fluctuations in recent years, reaching record highs in 2024.
Despite acknowledging a desire to exonerate Remillard, Sippel maintained that the evidence pointed towards spoofing, leading to the decision for dismissal. “I reached the conclusion that the only appropriate sanction for this gross misconduct was summary dismissal,” Sippel concluded. The tribunal will now weigh the evidence and determine whether Remillard’s dismissal was justified.
