JPMorgan Wins The Silver Price Fixing Lawsuit

Reuters wrote today that the world’s biggest commercial bank, JPMorgan Chase & Co., has won the dismissal of a nationwide investors’ lawsuit accusing the largest U.S. bank of conspiring to drive down silver prices. From their news update:

U.S. District Judge Robert Patterson in Manhattan said the investors, who bought and sold COMEX silver futures and options contracts, failed to show that JPMorgan manipulated prices at their expense, including by amassing huge short positions that were not justified by market events at the time.

In a decision made public on Monday, Patterson said that while the investors showed that JPMorgan had the ability to influence prices, a fact the bank did not dispute, they failed to show that the bank “intended to cause artificial prices to exist” and acted accordingly.

Ed Steer commented on the news in his daily newsletter. His reaction is highly relevant in our opinion. Rightfully he asks the question how Ted Butler could not be involved in this lawsuit.

I knew just about right from the outset that this case had no chance…and said so.  How can one successfully bring a case against JPMorgan for price fixing in the silver market when the world’s #1 silver expert isn’t even asked to supply evidence or testify?  The case was so poorly handled on a legal basis, that it almost seemed like it was designed to fail from the beginning…a fact that I pointed to anyone who would listen…Ted Butler included.  I’m sure he’ll have something to say about it in his mid-week column tomorrow…and it’s a pretty good bet that whatever it is will be posted in the public domain soon after.

It was only two weeks ago that we wrote the following in the article on our site “Ted Butler: Highest Concentrated Position In Silver In History

I would estimate JPMorgan’s concentrated short position to be 27,500 contracts as of the cut-off. I had expected JPMorgan to have covered more in this report and the raptors not to have bought as much as they did. JPM may have set a record of sorts in that it holds nearly 90% of the total commercial short position of 30,900 contracts. In other words, without JPMorgan, there would be a total commercial net short position in COMEX silver of less than 3500 contracts and no one could begin to allege price manipulation. Instead, I don’t believe there has ever been such a large concentrated position in history in which one trader held virtually the entire net position of all the other commercials. In a very real sense, it is JPMorgan against the world of silver.

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