Dear Friend of GATA and Gold (and Silver):
An updated complaint in the class-action lawsuit against JPMorganChase alleging manipulation of the silver futures market, filed this week in U.S. District Court for the Southern District of New York, details the mechanisms of the manipulation and some of the traders executing it.
According to the updated complaint:
— MorganChase already had a large short position in silver when it acquired another large short position upon the investment house’s acquisition of the failed New York brokerage Bear Stearns in 2008. This, the complaint says, gave MorganChase hugely disproportionate influence in the silver market.
— MorganChase used “fake” and “spoof” trades to manipulate prices downward, particularly in advance of contract expiration dates, when MorganChase held put options, which became more valuable as the price of silver was driven down.
— MorganChase reduced its short position following the May 25, 2010, hearing of the U.S. Commodity Futures Trading Commission, in which complaints of gold and silver market manipulation figured heavily. (GATA Chairman Bill Murphy and board member Adrian Douglas testified at that hearing and presented a statement by a London silver futures trader, Andrew Maguire, detailing market manipulation he had witnessed.)
— MorganChase regularly engaged in uneconomic trading activity in silver whose only purpose was price manipulation.
— The CFTC received a detailed complaint about silver market manipulation from a “whistleblower” (this is presumably Maguire).
–Market circumstances during the period of manipulation alleged by the lawsuit were much different from the circumstances previously investigated by the CFTC when it concluded that there had been no manipulation.
While these are all only allegations, the silver price manipulation case against MorganChase is now extensively detailed with names of participants, specific actions and their dates, and identities of participants. Market experts no doubt will find much more of signifance in the consolidated complaint.
King World News has just published a summary of the consolidated complaint here:
The full complaint can be found at GATA’s Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Categories: News mix