March 2010 - The Andrew Maguire Saga
September 2010 - Another Example of Silver Price Manipulation
October 27, 2010 - Lawsuit filed against JPMorgan and HSBC
November 3, 2010 - RICO suit filed against JPMorgan and HSBC
December 13, 2010 - Water Meet Blood: JPMorgan admits to and reduces massive silver position
December 15, 2010 - What Silver Vigilantes Understand That You Probably Don't
March 2010 - The Andrew Maguire Saga
I'll begin first by saying that there have been many in the investor community who have long claimed that the prices for gold and silver have been kept artificially low by those in power, for reasons either financial or political, and often times both. Up until recently however, these people have been dismissed as nothing more than conspiracy theorists or disgruntled speculators, pissed off because they got caught on the wrong side of a trade. In early 2010 this all changed, as whistle blower, Andrew Maguire, provided the Commodities Futures Trading Commission (CFTC) with a step-by-step account of how traders at JP Morgan in London were going to game the market in the coming days. [The CFTC is to commodities trading what the SEC is to stock trading - purportedly a watch dog over the markets.] This was done in a series of emails beginning in late January 2010, culminating with a call to action by Maguire to his contact at the CFTC, Eluid Ramirez, on February 9th. It is apparent that Maguire was seeking some form of formal investigation, especially after providing the CFTC with a trail that even an amateur trader like myself could follow, and when nothing material came out of the CFTC after more than a month, Maguire released his email correspondence with the CFTC to the Gold Anti-Trust Action Committee (GATA), an organization that has for years been front-and-center in the fight to unveil manipulations in the precious metals markets.
And now, the actually story released by GATA on March 25th.
Additional Statement by Bill Murphy, Chairman
Gold Anti-Trust Action Committee
to the U.S. Commodity Futures Trading Commission
Washington, D.C., March 25, 2010
On March 23, 2010, GATA Director Adrian Douglas was contacted by a whistleblower by the name of Andrew Maguire. Maguire is a metals trader in London. He has been told first-hand by traders working for JPMorganChase that JPMorganChase manipulates the precious metals markets, and they have bragged to how they make money doing so.
In November 2009 Maguire contacted the CFTC enforcement division to report this criminal activity. He described in detail the way JPMorgan Chase signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals alongside JPM. Maguire explained how there are routine market manipulations at the time of option expiry, non-farm payroll data releases, and COMEX contract rollover, as well as ad-hoc events.
On February 3 Maguire gave two days' warning by e-mail to Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. On February 5, as market events played out exactly as predicted, further e-mails were sent to Ramirez while the manipulation was in progress.
It would not be possible to predict such a market move unless the market was manipulated.
In an e-mail on February 5 Maguire wrote: "It is common knowledge here in London among the metals traders that it is JPM's intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC's allowing by your own definition an illegal concentrated and manipulative position to continue."
Expiry of the COMEX April call options is tomorrow, March 26. There was large open interest in strikes from $1,100 to $1,150 in gold. As always happens month after month, HSBC and JPM sell short in large quantities to overwhelm all bids and make unsuspecting option holders lose their money. As predicted by GATA, the manipulation started on March 19, when gold was trading at $1,126. Last night it traded at $1,085.
This is how much the gold cartel fears the CFTC's enforcement division. They thumb their noses at you because in more than a decade of complaints and 18 months of a silver market manipulation investigation nothing has been done to stop them. And this is why JPM's cocky and arrogant traders in London are able to brag that they manipulate the market.
This is an outrage and we are making available to the press the e-mails from Maguire wherein he warns of a manipulative event.
Additionally Maguire informed us that he has tape recordings of his telephone communications with the CFTC, which we are taking the appropriate legal steps to acquire.
* * *
From: Andrew Maguire
Sent: Tuesday, January 26, 2010 12:51 PM
To: Ramirez, Eliud [CFTC]
Cc: Chilton, Bart [CFTC]
Subject: Silver today
Dear Mr. Ramirez:
I thought you might be interested in looking into the silver trading today. It was a good example of how a single seller, when they hold such a concentrated position in the very small silver market, can instigate a selloff at will.
These events trade to a regular pattern and we see orchestrated selling occur 100% of the time at options expiry, contract rollover, non-farm payrolls (no matter if the news is bullish or bearish), and in a lesser way at the daily silver fix. I have attached a small presentation to illustrate some of these events. I have included gold, as the same traders to a lesser extent hold a controlling position there too.
Please ignore the last few slides as they were part of a training session I was holding for new traders.
I brought to your attention during our meeting how we traders look for the "signals" they (JPMorgan) send just prior to a big move. I saw the first signals early in Asia in thin volume. As traders we profited from this information but that is not the point as I do not like to operate in a rigged market and what is in reality a crime in progress.
As an example, if you look at the trades just before the pit open today you will see around 1,500 contracts sell all at once where the bids were tiny by comparison in the fives and tens. This has the immediate effect of gaining $2,500 per contract on the short positions against the long holders, who lost that in moments and likely were stopped out. Perhaps look for yourselves into who was behind the trades at that time and note that within that 10-minute period 2,800 contracts hit all the bids to overcome them. This is hardly how a normal trader gets the best price when selling a commodity. Note silver instigated a rapid move lower in both precious metals.
This kind of trading can occur only when a market is being controlled by a single trading entity.
I have a lot of captured data illustrating just about every price takedown since JPMorgan took over the Bear Stearns short silver position.
I am sure you are in a better position to look into the exact details.
It is my wish just to bring more information to your attention to assist you in putting a stop to this criminal activity.
Kind regards,
Andrew Maguire
* * *
From: Ramirez, Eliud [CFTC]
To: Andrew Maguire
Sent: Wednesday, January 27, 2010 4:04 PM
Subject: RE: Silver today
Mr. Maguire,
Thank you for this communication, and for taking the time to furnish the slides.
* * *
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]
Sent: Wednesday, February 03, 2010 3:18 PM
Subject: Re: Silver today
Dear Mr. Ramirez,
Thanks for your response.
Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event signaled for Friday, 5th Feb. The non-farm payrolls number will be announced at 8.30 ET. There will be one of two scenarios occurring, and both will result in silver (and gold) being taken down with a wave of short selling designed to take out obvious support levels and trip stops below. While I will no doubt be able to profit from this upcoming trade, it is an example of just how easy it is to manipulate a market if a concentrated position is allowed by a very small group of traders.
I sent you a slide of a couple of past examples of just how this will play out.
Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the U.S. dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added, overcoming any new bids and spiking the precious metals down hard, targeting key technical support levels.
Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels.
Both scenarios will spell an attempt by the two main short holders to illegally drive the market down and reap very large profits. Locals such as myself will be "invited" on board, which will further add downward pressure.
The question I would expect you might ask is: Who is behind the sudden selling and is it the entity/entities holding a concentrated position? How is it possible for me to know what will occur days before it will happen?
Only if a market is manipulated could this possibly occur.
I would ask you watch the "market depth" live as this event occurs and tag who instigates the move. This would surly help you to pose questions to the parties involved.
This kind of "not-for-profit selling" will end badly and risks the integrity of the COMEX and OTC markets.
I am aware that physical buyers in large size are awaiting this event to scoop up as much "discounted" gold and silver as possible. These are sophisticated entities, mainly foreign, who know how to play the short sellers and turn this paper gold into real delivered physical.
Given that the OTC market (where a lot of the selling occurs) runs on a fractional reserve basis and is not backed up by 1-1 physical gold, this leveraged short selling, where ownership of each ounce of gold has multi claims, poses a very large risk.
I leave this with you, but if you need anything from me that might help you in your investigation I would be pleased to help.
Kind regards,
Andrew T. Maguire
* * *
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 2:11 PM
Subject: Fw: Silver today
If you get this in a timely manner, with silver at 15.330 post data, I would suggest you look at who is adding short contracts in the silver contract while gold still rises after NFP data. It is undoubtedly the concentrated short who has "walked silver down" since Wednesday, putting large blocks in the way of bids. This is clear manipulation as the long holders who have been liquidated are matched by new short selling as open interest is rising during the decline.
There should be no reason for this to be occurring other than controlling silver's rise. There is an intent to drive silver through the 15 level stops before buying them back after flushing out the long holders.
Regards,
Andrew
* * *
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]; GGensler [CFTC]
Sent: Friday, February 05, 2010 3:37 PM
Subject: Fw: Silver today
A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? I have honored my commitment not to publicize our discussions.
I hope you took note of how and who added the short sales (I certainly have a copy) and I am certain you will find it is the same concentrated shorts who have been in full control since JPM took over the Bear Stearns position.
It is common knowledge here in London among the metals traders that it is JPM's intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC's allowing by your own definition an illegal concentrated and manipulative position to continue.
Bart, you made reference to it at the energy meeting. Even if the level is in dispute, what is not disputed is that it exists. Surely some discussions should have taken place between the parties by now. Obviously they feel they can act with impunity.
If I can compile the data, then the CFTC should be able to too.
I would think this is an embarrassment to you as regulators.
Hoping to get your acknowledgement.
Kind regards,
Andrew T. Maguire
* * *
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 7:47 PM
Subject: Fw: Silver today
Just logging off here in London. Final note.
Now that gold is undergoing short covering, please look at market depth right now in silver and evidence the large selling blocks in a thin market being put in the way of silver regaining the technical 15 level, which would cause a short covering rally and new longs being instigated. This is resulting in the gold-silver ratio being stretched to ridiculous levels.
I hope this day has given you an example of how silver is "managed" and gives you something more to work with.
If this was long manipulation in, say, the energy market, the shoe would be on the other foot, I suspect.
Have a good weekend.
Andrew
* * *
From: Andrew Maguire
Sent: Tuesday, February 09, 2010 8:24 AM
To: Ramirez, Eliud [CFTC]
Cc: Gensler, Gary; Chilton, Bart [CFTC]
Subject: Fw: Silver today
Dear Mr. Ramirez,
I hadn't received any acknowledgement from you regarding the series of e-mails sent by me last week warning you of the planned market manipulation that would occur in silver and gold a full two days prior to the non-farm payrolls data release.
My objective was to give you something in advance to watch, log, and follow up in your market manipulation investigation.
You will note that the huge footprints left by the two concentrated large shorts were obvious and easily identifiable. You have the data.
The signals I identified ahead of the intended short selling event were clear.
The "live" action I sent you 41 minutes after the trigger event predicting the next imminent move also played out within minutes and exactly as I outlined.
Surely you must at least be somewhat mystified that a market move could be forecast with such accuracy if it was free trading.
All you have to do is identify the large seller and if it is the concentrated short shown in the bank participation report, bring them to task for market manipulation.
I have honored my commitment to assist you and keep any information we discuss private,however if you are going to ignore my information I will deem that commitment to have expired.
All I ask is that you acknowledge receipt of my information. The rest I leave in your good hands.
Respectfully yours,
Andrew T. Maguire
* * *
From: Ramirez, Eliud
To: Andrew Maguire
Sent: Tuesday, February 09, 2010 1:29 PM
Subject: RE: Silver today
Good afternoon, Mr. Maguire,
I have received and reviewed your email communications. Thank you so very much for your observations.Pretty convincing testimony in my humble opinion. Is it true? I honestly don't know how anyone could predict this sort of thing unless they were truly connected to inside information from the source. Now, things get even more curious....the following taken from a GATA post on March 27th, two days after Mr. Maguire's emails are released to the public.
On March 25th at the CFTC Public Hearing on Precious Metals GATA made a dramatic revelation of a whistleblower source, Andrew Maguire, who has first hand evidence of gold and silver market manipulation by JPMorganChase, and who had tipped off the CFTC in advance of manipulation in gold and silver some months ago.Coincidence? I guess it's possible, and of course, no one can say for sure, but you have to at least admit that the timing of this incident seems a bit too convenient to be a coincidence. Looks to me like Mr. Maguire might've struck a nerve with someone....
On March 26th while out shopping with his wife in the London area, Mr. Maguire's car was hit by a car careening out of a side road. The driver of the vehicle then tried to escape.
When a pedestrian eye-witness attempted to block the driver's escape he accelerated at him and would have hit him had the pedestrian not jumped out of the way. The car then hit two other cars in escaping. The driver was apprehended by the police after police helicopters were used in a high speed chase.
Andrew and his wife were hospitalized with minor injuries. They were discharged from hospital today and should make a full recovery.
Finally, here is an interview with Mr. Maguire conducted by King World News in the UK, on March 30th. Unfortunately, King World is not allowing for redistribution of this content, so I can't post it directly on this site - only direct you to the King World site where you can download and listen to it yourself.
Interview with Andrew Maguire
September 2010 - Another Example of Silver Price Manipulation
I'm not going to post the entire article here, but following is a link to a piece written by Bix Weir, a frequent poster at the SilverSeek website.
The Nuts and Bolts of COMEX Silver ManipulationI think it's worth a read, as it exemplifies the manipulation here in the US on the New York COMEX (that's Commodities Exchange, in case you were wondering).
October 27, 2010 - Lawsuit filed against JPMorgan and HSBC
Ahhh finally! From Tyler Durden at Zerohedge.
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.November 3, 2010 - RICO suit filed against JPMorgan and HSBC
The lawsuit alleges that the means by which JPM and HSBC manipulated the market is as follows:
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.
- 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.
Once again, credit to Tyler Durden and Zerohedge.
If JPM and HSBC hoped that the lawsuits filed a week ago by Brian Beatty and Peter Laskari, which we discussed previously, were going to be the end of their public exposure with regard to possible silver market manipulation, they are about to be disappointed. Today, in a separate lawsuit filed by Carl Loeb in the Southern District of New York, a new light on precious manipulation by the duo was shone, this time involving allegations of breach of the Racketeering Influenced and Corrupt Organizations (RICO) Act. And with the CFTC itself admitting of ongoing manipulation in the silver market, it appears this issue is not going to go away quietly any time soon. Per Steve Berman, co-counsel of plaintiff law firm Hagens Berman Sobol Shapiro: "The practice of naked short selling has long been a serious issue on Wall Street. What we know about the scope and intent of JP Morgan and HSBC's actions in this short-selling scheme dwarfs any other similar attempt to manipulate a commodities market." As this case is also seeking class action status for the class, readers who wish to join this particular case may apply to do so at the following link. Plaintiffs are seeking that the court enjoin JP Morgan and HSBC from continuing their alleged conspiracy and manipulation of the silver futures and options contracts market.Click the zerohedge link above to access the entire story.
December 13, 2010 - Water Meet Blood: JPMorgan admits to and reduces massive silver position/font>
Here, Zerohedge once again chronicles the latest and greatest with respect to JPM and the silver market.
In the latest example that virtually every conspiracy theory is almost always inevitably proven to be fact, the Financial Times reports that JP Morgan, the firm targeted by thousands of "tin foil hat" wearing, conspiratorially-oriented "gold bugs", has cut back on its US silver futures. "JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal." And in what can only be considered an unprecedented victory for all those who have over the past year agitated to putting JP Morgan out of business, most recently spearheded by the likes of Mike Krieger and Max Keiser, by forcing a massive short squeeze on its commodities trading desk, we learn that "the decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past." Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short. Attempting to make others believe that this short could be covered without pushing the price of the silver metal to over $100/ounce is an indication of either how stupid JPM believes the general population to be, or just how desperate the firm is to end the ongoing short squeeze onslaught. Either way, we are confident that this first unprecedented confirmation that a) JPM is indeed massively short silver and b) that it is hurting bad, will merely redouble efforts to put the world's biggest financial company out of business. Lastly, this means that silver is about to really blast off as the push to really hurt JPM takes off in earnest.
From FT:
The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.And while we revel in the knowledge that the short squeeze is causing massive pain for JPM, we are far more overjoyed that the days of Blythe Masters as head of JPM's commodities desk is coming to an end: any comparable massive admission of weakness by a trader is always and inevitably followed by some very high profile terminations.
However, JPMorgan said in a statement: “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.” The bank declined to comment on whether it had reduced its position in the silver market.
The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.
In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.
But Bart Chilton, a CFTC commissioner, said in October that he believed there had been “fraudulent efforts” to “deviously control” the silver price. He did not name any party.
Publicly available data on individual traders’ positions are sketchy. In a speech last Wednesday, Mr Chilton said that “earlier this year, one trader held more than 40 per cent of the silver market”. He declined to identify the trader.
The CFTC’s Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.
The CFTC only reports data for the US silver futures market, a small corner of the global derivatives market for the precious metal, which is centred in London and largely traded via private over-the-counter deals. The data also do not cover transactions in the physical market.
Analysts and traders said that JPMorgan’s large short positions on New York’s Comex exchange, a division of Nymex, were hedges for the bank’s long positions in physical silver and London’s over-the-counter market.
JPMorgan has invested nearly $3bn over the past two years in its commodities business led by Blythe Masters.
December 15, 2010 - What Silver Vigilantes Understand That You Probably Don't
From Mark McHugh and his site, Across the Street. I won't post the whole article here, but it is definitely worth a read for anyone out there still questioning the validity of silver as a part of your portfolio.
What the silver vigilantes understand the you probably don't (arithmetic, human nature and other stuff)
More updates to follow......
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