JP Morgan Silver Manipulation Lawsuit Revived By Appeals Court!

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On June 29, 2016, US District Court Judge Paul Engelmayer dismissed a lawsuit against JP Morgan Chase & Co. which alleged that the bank had engaged in extensive manipulation of the price of silver, in violation of both state and federal  antitrust laws. The plaintiffs appealed. On February 1, 2017, the US Appeals Court for the 2nd Circuit Court of Appeals held that their complaint contained sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. This reverses the lower court and revives the lawsuit.

In other words, JP Morgan is now back on the “hot seat”. The most important result of this important decision is that the bank will be forced to face the process of “discovery”. Lawyers have a number of tools with which to ferret out the truth. JPM will face interrogatories, subpoenas, depositions and requests for documents. That means internal documents will be pried open.

Is JP Morgan the sole entity responsible for silver price manipulation? We don’t know that. Furthermore, our system of law and justice tells us that everyone, even mega corporations, are innocent until proven guilty. That having been said, the evidence that both the gold and silver market is being heavily manipulated is very strong.  A lot of fingers have pointed to JP Morgan but, in my view, much more than one bank is responsible. There are a number of other banks that are already being sued in other lawsuits.

The results of discovery may further implicate other banks and brokerage houses. It could make it possible to extract trading information from the Commodities Futures Trading Commission (CFTC), which improperly closed its own investigation of silver trading. The same issues are now being investigated by private sector lawyers who have no interest in cashing in on the possibility of future employment with the bank.  Maybe, this will help to drain the swamp.
You can read the appellate court decision, in its entirety, by clicking the link below.

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17 thoughts on “JP Morgan Silver Manipulation Lawsuit Revived By Appeals Court!”

  1. The CFTC, as we all here understand, did not rule that there was no manipulation of PM’s, only that they found nothing “actionable”. In the informed PM community, that is widely interpreted as “The Government was behind the manipulation so we cannot act further”?
    IF this now moves into the discovery phase, what are the consequences of undercovering Government direction whereby JPM was simply acting as an implementing Agent for USG? In particular, the ESF has legal authority to intervene in ANY market it so chooses, as I understand it. So what happens then?
    Perhaps under those circumstances, the best outcome might be that there has to be a disclosure that indeed USG has been manipulating the PM markets? At least we could then finally put that to rest.

    1. It is my view that the evidence mainly shows that the US government was involved in subsidizing the manipulation of gold, rather than silver. Of course, silver manipulation is facilitated by gold manipulation, because the two metals are heavily cross-traded. But, it seems to be primarily opportunistic activity. I do not think the ESF or the government’s immunity will free the banks of liability for silver shenanigans.

      1. Thanks and, by the way, I very much respect your opinions.
        It is my belief that the USG sometimes manipulates Gold via Silver because they do indeed both trade together. Nonetheless, given your statement, how then do you explain the non-results of the (second) this time FIVE year CFTC investigation into SILVER market rigging? Was that incompetence, stupidity or both of the above if they were not trying to shield USG/The Fed/The ESF etc?

        1. It is, of course, possible for silver manipulation to be government subsidized. But, after closely watching it for many years, I have concluded that it is a type of frontrunning of the government sponsored manipulations in the gold market.

          As to regulatory incompetence… let’s face it… we have a swamp in D.C. Lots of people who work for the government want nothing more than to switch to more lucrative jobs at the banks. Others are specifically sent to regulatory agencies from inside their banks and brokerage houses to act as “Trojan Horses” to protect their former employer’s interests. They return to the financial industry with bigger salaries after they protect its interests in Washington. Deference to those who can make a “regulator’s” future career or break it, in my view, is the number 1 reason for seeming regulatory incompetence.

          Second, but particularly important in the case of the silver manipulation scam, is the deep intertwined nature of the price of silver and gold. If they fully investigate silver, and then publicize the result, it would “out” the government sponsored gold players. I strongly suspect that the same corrupt players are working both the gold and silver market, with and without subsidies. They are front-running silver based on the government subsidized operations in gold.

          This is possible to do because the two metals mostly move together. The silver market is smaller than the gold market, and it is easier to trigger huge (and highly profitable) volatility. Also, in silver the banks don’t face the prospect of an occasionally unfriendly foreign central banker (ie: France in the 1970s, Russia now), with serious resources, and the potential to put them out of business. It is more conducive to private manipulations. They don’t need the US government, in the short term, as long as they allow prices to rise over the very long term.

          The players sometimes push silver prices excessively upward, even though most of the manipulations are price suppressive. The reason for price suppression is not a “dislike” of silver or gold. I am almost certain that they get a government subsidy with gold, and silver prices follow gold. The key to profitable precious metals price management, and front-running the government’s operations in gold, is not price suppression, but rather the induction of artificially high volatility.

          Volatility is also the main goal of the government subsidized operation, at least most of the time. The reason is that most of the manipulation seems to be oriented around keeping conservative investors in bonds. They don’t want money pouring out of bonds and back into gold as it often did prior to 1933. So long as gold suffers from heavy price instability, investors will continue to buy bonds in spite of the fact that the metal appreciates more than bonds, over very long time periods. Secondarily, at times of great US dollar weakness, direct support of the dollar’s exchange value is also involved, but this is rare.

  2. Yes agreed all, especially that being a much smaller market and that Gold and Silver move together, manipulation of Silver is a cheaper way of manipulating Gold.
    The volatility aspect was revealed by WikileAKS in the recent Diplomatic cable from London, confirming that the aim of the futures markets was to create volatility and thereby discourage Americans from buying physical Gold.

    It is clear from the “market” data that BOTH metals are being manipulated AND, perhaps more importantly, the manipulators have stopped trying to cover their tracks. For instance, look at the Gold Charts at 2AM Eastern time every day last week. The metals clearly should be and want to be higher. So one has to ask the question WHY don’t the Banks just let it happen and make a ton of money in the process. That would be a kind of “Wash/Rinse” cycle like at present to soak the Specs but it would be on steroids? The answer, presumably, is that their “Principal” is calling the trading shots. Many of the trades are made at 2AM and are clearly not made with a profit motive but to suppress prices. That surely can only be because those trades are made on behalf of an Institution or Institutions that can print as much money as necessary to achive the desired result(s)?

    That being the case, I return to my earlier contention that the Bullion Banks would claim immunity to any market rigging charges because they were acting on behalf of USG which itself is acting entirely within the law. You seem to reject this? I continue to believe that the best that can come out of the discovery process in these actions is that it can be demonstrated once and for all that PM’s ARE being manipulated by Governments and Central Banks etc. in such a way that even the MSM could not avoid it.

    1. I don’t reject the idea. After observing price and volume movements over the years, I simply concluded that silver is an “afterthought” manipulation, secondary and somewhat dependent upon the primary manipulation, which involves gold. You could make a convincing argument that every single commodity listed on the futures markets has been manipulated, in the past, with the periodic tacit blessing of the certain persons within the federal government. The government does have a strong interest in controlling prices of commodities like corn, pork bellies, interest rate swaps, coal and/or oil etc..

      I have no doubt that certain well-connected government bureaucrats and former banksters have clearly influenced the more active banksters on virtually all commodities to some extent. At the very least, it is clear that the Federal Reserve is supplying whatever so-called “liquidity” the banksters need to temporarily crush counter-parties, no questions asked. The money is newly created, using the guise of “temporary” loans that provide cash at below market rates, whenever the primary dealers want cash. This allows the banksters and their controlled hedge funds to fund performance bonds, and provides the background support needed for the artificial induction of long and short squeezes.

      My impression, however, is that the overt subsidies and liens against well-known public property (ie: gold swaps against US-owned gold at Fort Knox and elsewhere) has only been provided in the past (by Obama and others) to assist in gold price management activity. The passive support activity, described above, is insufficient to provide the banks with sovereign immunity as agents carrying out government policy, except with respect to gold.

      1. I guess time alone will tell and I hope you are right and that the Courts, unlike the “Regulators” will uphold the law. With several large Class Actions pending, it will be difficult for settlements to be made out of Court to prevent the discovery process taking place. Let’s hope that things start to get interesting?

  3. Unless, of course, Trump does something. The ESF falls under Treasury NOT The Fed. The Fed simply uses its trading platforms (Why on earth would a Central Bank need not one but TWO trading floors – One in NY and One in Chicago close to its HFT partners?) to execute ESF directions so if these directions change, the Fed would have to desist because its own Balance Sheet is already stretched to the limit.

    Trump seems to understand that Gold is money and seems to want a weaker Dollar. What better way to act, then, than by telling Treasury to back off on Gold manipulation such that the Dollar would weaken and Gold would rise?

    Wishful thinking perhaps but I do thing that there is some possibility, no matter how small, of something along those lines happening.

  4. Your copyright notice is noted and being an attorney, who can doubt your familiarity with copyright law? That being so, I wish it had been you instead of me who had the chore of notifying a certain fellow that he could not appropriate an article I wrote for free public distribution, place it in his website in a pay to read status, and all without offering me any percent of the prospective takings, or even asking my OK beforehand! He agreed to take it down while whining that I “don’t understand fair use.” Maybe his idea of realty law is that he can offer people campsites in someone’s backyard for a fee, and neither ask permission of the property owner first nor offer him a fair slice of the proceeds!

  5. Silver may be the best way to expose manipulation. Though, it be years down the road before resolved in court and silver metal price managers likely have some form of government cover as they are joined at the hip even if not acting as agent.

    Possible headline after resolution in court:
    The reporting might read something like:
    . . . worldwide instability and threats to financial system averted by timely interventions in the metal and commodities markets. Thankfully our government and banks had the foresight to take action at a critical time in our nation’s history.”

    Quote from Alan Greenspan: “The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves”

    1. Yes, that is my view but as noted above, only time will tell.
      Remember also that at this stage, NONE of the US Banks is implicated (Possibly because as we know the US Banks are all just doing God’s work?) and the alleged offenses relate to manipulation of the London Silver Fix. As we all understand, that is the smaller part of the manipulation of PM’s, the larger part being the fraud that is Comex and the LBMA.
      If the discovery phase goes ahead, hopefully it will be defined in a sufficiently broad way so as to capture evidence which might open fresh avenues against all of the above.

  6. Hello: do you have any insight with respect to the vast increase in the silver horde that is being accumulated by JP Morgan on Comex? Zerohedge published an occasional article but nothing recent. Towards to end of 2015 JPM had 60 million ounces in their Comex warehouse. By September 2016 that increased to 70 million ounces. A quick check yesterday showed they have 85 million ounces. The bankster obviously know something we don’t, but what?

    1. Good question. The bankers, including JPM, have also been taking massive deliveries of physical gold bars. Typically, they are delivering from customer accounts (probably non-connected hedge funds) and taking delivery of the gold into their house accounts, as an asset of the bank. I asked that same question in the article below. Perhaps, they expect precious metals prices to rise. But, why buy physical bars of these two precious metals? Why not buy futures, especially given that some among them probably control the futures market price? Or, if they fear losing control of the price, and therefore don’t want to leverage the purchases, it would be more sensible to purchase more shares in some of the many mining companies they already own. I can only speculate…

      1. Could it not also be connected with their largest customers, The ESF via the Fed and the BIS. The favored strategy for manipulation by the ESF is to short Comes futures, run the stops and have the Specs sell to create further selling into a downward spiral.

        So if the BB’s were to believe that the PM’s can’t be contained much longer, were they to use Comex longs to buy into that, they would be in direct conflict with the trading objectives of the ESF?

        Conversely, buying Physical metals has no impact on Comex prices. I know that sounds nonsensical but those who understand the way these markets work understands that in reality the supply and demand fundamentals do NOT influence the price of Gold. Which is precisely why the ESF/BIS/CB Complex established Futures markets (Now confirmed by Diplomatic cables from London recently published by Wikileaks) so as to create volatility and discourage Americans from owning physical metals.

        All of which MIGHT have some bearing on why the Bullion Banks are hording physical metals? If so, it’s a very encouraging sign because these Banks do understand the fundamentals whilst at the same time trading to crush them for as long as they are subsidised by the ESF/Fed? Just a thought..

  7. How can an individual who lost over $5M by owning silver and gold mining shares as well as physical silver and gold between Sep 6, 2011 and December 31, 2015 participate in legal actions to recover principal and receive punitive damages from these thieves?

    1. My advice would be to download the opinion of the court, the hyperlink for which is at the bottom of this article, and look up the plaintiffs’ attorneys, call them, and provide the details of your situation.

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