Blockswater

LLP

Florian Schweitzer
florian.schweitzer@blockswater.com


Finansinspektionen
Box 7821
103 97 Stockholm
Sweden

via email finansinspektionen@fi.se

September 17, 2017


Subject: Market abuse report - violation of 8 of the Swedish Financial
Instruments Trading (Market Abuse Penalties) Act (2005:377) and Article 12 of
the Regulation No 596/2014 of the European Parliament and of the Council of 16
April 2014 on market abuse (Market Abuse Regulation)

1. Dissemination of false and misleading information

JPMorgan Chase & Co. Chief Executive Officer Jamie DIMON presumably violated 8 of
the Swedish Financial Instruments Trading (Market Abuse Penalties) Act (2005:377)
and the European Unions Market Abuse Regulation (No 596/2014) by the
dissemination of false and misleading information.

At the Barclays financial conference in New York on Tuesday, September 12, Mr. DIMON
declared that cryptocurrency bitcoin was a "fraud that should only be invested in by
"murderers", "drug dealers" and people living in North Korea, Ecuador and Venezuela.

The Financial Times quoted Mr. DIMON stating following characterization of bitcoin:

"Its a fraud and honestly Im just shocked anyone cant see it for what it is," Mr Dimon said,
describing bitcoin as "worse than tulip bulbs."

"The only good argument Ive ever heard is that if you were in Venezuela or Ecuador or
North Korea, or if you were a drug dealer, a murderer, stuff like that, you are better off
dealing in bitcoin than in US dollars"

If we had a trader who traded bitcoin Id fire him in a second for two reasons. One, its
against our rules. Two, its stupid1

1 Financial Times: JPMorgans Jamie Dimon calls bitcoin a fraud, worse than tulip bulbs

https://www.ft.com/content/b1ee6c14-2cd0-3ad5-a9db-c8e82d993987
 2

Many news outlets around the world quoted2 Mr. DIMON and noted3 that his remarks
had negative impact on the cryptocurrency's price and reputation.

"Bitcoin initially slipped after Dimons remarks. It was down as much as 2.7 percent",
financial news agency Bloomberg wrote.


2. SE0007126024 and SE0007525332 trading activities

Following evidence suggests that Mr. DIMON knew, or ought to have known, that the
information he disseminated was false and misleading:

a) JP Morgan Securities Ltd. traded the exchange traded notes "BITCOIN XBT"
(SE0007126024) and "BITCOIN XBTE (SE0007525332) on Nasdaq Nordic
before and after his false and misleading comments.4 It can be presumed that JP
Morgan would not trade an instrument that follows a fraudulent underlying
asset, or that JP Morgans customers would not be "murderers" and "drug
dealers".

b) Even if Mr. DIMON was unaware that his firm was trading these instruments, his
statements that it would be "against our rules" or that he would "fire" any
employee who traded bitcoin "in a second, were evidently false because JP
Morgan Securities Ltd. was the 4th largest buyer of SE0007126024 three days
after his statements, on September 15.5



3. Market Manipulation

The European Union's Market Abuse Regulation (MAR) prohibits the manipulation of
markets through practices such as spreading false or misleading information.





2 Bloomberg: Jamie Dimon Slams Bitcoin as a Fraud

https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-s-ceo-says-he-d-fire-traders-who-
bet-on-fraud-bitcoin

3 Affrsvrlden: Jamie Dimon: Bitcoin r en bluff

https://www.affarsvarlden.se/bors-ekonominyheter/jamie-dimon-bitcoin-ar-en-bluff-6870542

4 Nasdaq Nordic: "Trades (transaction history)

http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE113749
http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE109538

5 Screenshot of www.nordnet.se

https://www.nordnet.se/mux/web/marknaden/aktiehemsidan/index.html?identifier=109538&marketid
=11 by Twitter user @IamNomad
https://twitter.com/IamNomad/status/908831764457672709

Blockswater LLP is registered in England and Wales with registered number OC306763 and registered
office at 27 Old Gloucester Street, London, WC1N 3AX, United Kingdom
 3

"The manipulation or attempted manipulation of financial instruments may also consist in
disseminating false or misleading information. The spreading of false or misleading
information can have a significant impact on the prices of financial instruments in a
relatively short period of time. It may consist in the invention of manifestly false
information, but also the wilful omission of material facts, as well as the knowingly
inaccurate reporting of information. That form of market manipulation is particularly
harmful to investors, because it causes them to base their investment decisions on incorrect
or distorted information. ... It is therefore necessary to qualify the spreading of false or
misleading information, including rumours and false or misleading news, as being an
infringement of this Regulation. It is therefore appropriate not to allow those active in the
financial markets to freely express information contrary to their own opinion or better
judgement, which they know or should know to be false or misleading, to the detriment of
investors and issuers."6

Nasdaq Nordic defines the term "market manipulation" in accordance with the
European Union's definition as "dissemination of information through the media,
including the Internet, or by any other means, which gives, or is likely to give, false or
misleading signals as to Listed Products, including the dissemination of rumors and false or
misleading news, where the person who made the dissemination knew, or ought to have
known, that the information was false or misleading."7

8 of the Swedish Financial Instruments Trading (Market Abuse Penalties) Act
(2005:377) defines "market manipulation" as actions to "improperly influence the
market price or other conditions for trading in financial instrument or otherwise mislead
the buyer or seller of such instruments", which is punishable with "imprisonment not
exceeding two years" in Sweden.8


I therefore kindly ask Finansinspektionen to examine the facts of the case as described
above and inform me about its findings.


Sincerely,


Florian Schweitzer

6 European Union: Regulation No 596/2014 of the European Parliament and of the Council of 16 April

2014 on market abuse (Market Abuse Regulation) http://eur-lex.europa.eu/legal-

content/EN/TXT/HTML/?uri=CELEX:32014R0596&from=DE

7 Nasdaq Nordic: Market Surveillance

http://www.nasdaqomx.com/digitalAssets/86/86052_marketsurveillancenasdaqomx12june2013.pdf

8 Global Regulation: Financial Instruments Trading (Market Abuse Penalties) Act (2005:377) Sweden

https://www.global-regulation.com/translation/sweden/2988816/act-%25282005%253a377%2529-
on-penalties-for-market-abuse-in-the-financial-trading.html

Blockswater LLP is registered in England and Wales with registered number OC306763 and registered
office at 27 Old Gloucester Street, London, WC1N 3AX, United Kingdom