JPM, HSBC Sued For Silver Market Manipulation, Reaping Billions In Illegal Profits

[Camtender]

http://www.zerohedge.com/article/jpm...llegal-profits

Yesterday's announcement by CFTC commissioner Bart Chilton that he was fully aware of fraudulent efforts to persuade and deviously control silver prices may have been the straw that broke the gold and silver price manipulating camel's back on precious metal manipulation. Today, Brian Beatty and Peter Laskaris (Southern District Court of New York, cases 10-08146, and 10-01857) sued the two firms at the very top of the precious metal manipulation pyramid: JPMorgan and HSBC. The lawsuit, which seeks class action status, alleges that "between in or about March 2008 and continuing through the present, Defendants have combined, conspired and agreed to restrain trade in, fix, and manipulate prices of silver futures and options contracts traded in this District on the COMEX division of the NYMEX. Defendants thereby have violated Section 1 of the Sherman Act, 15 U.S.C ¶1. Also during the Class Period, individual Defendants have intentionally acted to manipulate prices of COMEX silver futures and options contracts. Such conduct violates Section 9(a) of the Commodity Exchange Act, 7 U.S.C. ¶13b." And so, the tidal wave of lawsuits by all those who may have ever lost money trading precious metals against JPM et al begins.
The lawsuit alleges that the means by which JPM and HSBC manipulated the market is as follows:

• Defendants have effected their foregoing restraint of trade and manipulation through diverse means. These means themselves include lawful and unlawful acts.
• Defendants have held large positions in silver futures and silver options.
• Defendant have held a concentrated and substantial amount of the open interest in silver futures contracts
• Defendants have made large trades at key times.
• Defendants or others have made large "spoof" orders which appeared on the trading screens; "spoofing" is the submission of a large order which is not executed but influences prices and is then withdrawn before it reasonably can be executed.
• Defendants have communicated with and/or signalled one another their trades.

In the suit, the plaintiff allege that JPM and HSBC in August 2008 held 85% of the net short position in silver and by the first quarter 2009 held $7.9 billion in precious metal derivatives.
Some amusing observations from the plaintiffs:

Prior to public complains and the government investigation of manipulation of COMEX silver futures prices that began in March 2010, silver prices greatly underperformed gold prices. Since the government investigation began, silver prices have greatly outperformed gold prices.

This "price signature" is precisely consistent with what would be expected of very reputable firms (like the JP Morgan Group Defendants and the HSBC Group Defendants) when their unlawful activities are threatened by government investigations and possible exposure, and compliance intercedes.

Laskaris and Beatty further allege that Defendants reaped hundreds of millions if not billions of dollars in profits from the conspiracy.
Damages sought by plaintiffs include damages that may be tripled, and various other remedies.
In the meantime, as this lawsuit seeks class status, we are confident many readers will enjoin the plaintiffs. Especially since, as is suddenly all too well known, the CFTC's bias to perpetually rule in favor of the commission has been exposed for all to see. Will the be the watershed case that finds two of the biggest market manipulators finally guilty?
Oh, and, with one more "conspiracy theory" about to be proven for fact, can the tin foil hat be taken off now?

[Camtender]

Re: JPM, HSBC Sued For Silver Market Manipulation, Reaping Billions In Illegal Profits

http://www.itulip.com/forums/showthr...56095#poststop

Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Silver price manipulation? If it looks too bad to be true, it probably is

I continue to receive emails asking for my opinion on the now week old report by purported silver fraud whistle blower Andrew Maguire and Adrian Douglas of GATA. Their tale of silver price manipulation involving bankers and regulators told in an interview on the King World News last week has been billed as the “largest financial fraud in history.”

As a long time gold and silver investor, not a trader, I’m probably the wrong guy to ask, because I’ve never been a fan of GATA and price manipulation theories. I think it's a lot of nonsense, and this story strikes me as no more credible than any previous one.

For readers who are not familiar with the organization, GATA is the Gold Anti-Trust Action Committee. I became aware of GATA before the group’s inception, when the idea of forming such a group was batted around gold sites such as Kitco’s old forums that I was reading in the mid 1990s as background research before getting into the gold market in 2001.

GATA’s mission is “to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities.” The premise of GATA was that one or more trusts exist to control the price of gold. Later GATA extended its mission to include the silver market where manipulation is also believed by some traders and investors to occur.

The gold trust of course aims to suppress gold and silver prices not raise them. If the purpose of the trust was to push gold and silver prices up, then who’d complain and why would GATA exist? GATA’s beef is that a cabal of investment banks, central banks, and other nefarious and well-funded parties in the gold and silver markets act to push prices around in the short-term, taking money from independent traders, and also down in the long-term, taking money from buy-and-hold gold investors like me.

Before I go on, I should point out to new readers that my view of the gold and silver markets is not disinterested. I write from the vantage point of one who got into the gold market in 2001 when gold traded at $265. I also bought silver, but not nearly as much, in the same year at an average price of $4.25.

Since then I’ve checked in on GATA from time to time when stories alleging gold and silver price suppression cropped up. Over nine years, as numerous GATA reports of price manipulation appeared, I watched the price of gold move year after year in one direction: up. In fact, the gold price has not ended one year during that period below its opening price. Silver was more volatile on an annual basis, but nine years later it now also trades for more than four times what I paid for it. The relatively small platinum purchase I made has by comparison risen only 3.7 times, but I never hear about platinum price suppression.

As I watched the price of my gold and silver rise, I found GATA’s claims of gold price suppression increasingly curious. If there is a cabal scheming to hold down the price of gold and silver, it must be an exceedingly stupid and poorly organized cabal. It appears that it goofed and suppressed the stock market instead.

I have to admit, at this point I am skeptical about some of the criticism(not all) that is being pointed at GATA right now.

If xPat and EJ are correct on the "no such thing as naked shorting in commodities", why didn't someone at the CFTC hearing simply say......... "there is no such thing as naked shorts in the commodities..............", "next person please..................."

After days of reading on commodities, Itulip is the one to break the big story days after the CFTC hearing that "naked short selling" is not in the commodities market?

Can anyone address the two comments I posted above that clearly indicates that the London Metal Exchange has physical delivery requirement on short positions, or is the London Metal Exchange full of crap too?

[Spartacus]

Re: JPM, HSBC Sued For Silver Market Manipulation, Reaping Billions In Illegal Profits

these were filed the same day Chilton made his comments

So

Question for any US based lawyer here: how long does it take to do absolute minimal legwork to file a lawsuit in NY? How long were these in the works, (or IOW what's the minimal time and what's a reasonable time we can reasonably guess the plaintiffs were working on these) before Chilton's remarks?

http://www.zerohedge.com/article/jpm...llegal-profits