First Official Complaint Filed To DOJ-Anti Trust Over JPM's Role In Silver Manipulation Case

Tyler Durden's picture

Someone had to do it. So we applaud Jason Hommel of Silver Stock Report for submitting the first official complaint to the United States Department of Justice over the recent revalations of unprecedented manipulation and fraud in the silver (and gold) market.

Citizen Complaint Center
Antitrust Division
950 Pennsylvania Ave., NW
Room 3322
Washington, DC 20530

Re: Reporting Antitrust Concerns
http://www.justice.gov/atr/contact/newcase.htm#submit

Step 1: Fully Describe Your Concern

1.  What are the names of companies, individuals, or organizations that are involved?

The
CFTC, the Commodity Futures Trading Commission, is withholding the
names, with the excuse given that they cannot reveal the names, because
of statute. But, a statute, which may violate other laws, is no excuse
for obstruction of justice, dereliction of duty, misprison of fraud, or
conspiracy to defraud the United States. 

The COMEX, owned by
the CME Group, also has the data on who is primarily involved, as the
antitrust violaters trade on their exchange. http://finance.yahoo.com/q?s=cme

JPMorgan Chase & Co. has
been named by thousands of writers in the private sector, all over the
internet, based on the reports of the BIS, the Bank of International
Settlements and the OCC, the Office of the Comptroller of the Currency
at the US Treasury, that they manipulate the precious metals markets by
fraudulently selling metal that does not exist.  This Bank report
indicates that JPMorgan Chase & Co. is heavily involved, far more than any other, in derivatives, exceeding $72 trillion. 

JPMorgan Chase & Co.
270 Park Avenue
New York, NY 10017

http://www.occ.treas.gov/ftp/release/2009-161a.pdf

=====

2. 
How do you believe they have violated the federal antitrust laws? (For
details on federal antitrust laws, see Antitrust Laws and You.)
http://www.justice.gov/atr/laws.htm

RE:  Sherman Antitrust Act
This Act expresses our national commitment to a free market economy
in which competition free from private and governmental restraints
leads to the best results for consumers. This Act outlaws all
contracts, combinations, and conspiracies that unreasonably restrain
interstate and foreign trade. This includes agreements among
competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies.

JPMorgan Chase & Co. holds
a large, concentrated, short position in silver futures contracts at
the COMEX that allows them to unreasonably fix prices for silver lower
than they should be, which resulted in widespread shortages of retail
bullion, and 1000 oz. silver bars, over several months in 2008, at
which time, I became a bullion dealer to help relieve the shortages
caused by this price manipulation.  I had to wait up to 5 weeks for
delivery of 1000 oz. bars from one of the world's largest wholesale
suppliers at the time.

It has been estimated that JPMorgan Chase & Co. has
held up to, and over, 90% of the commercial short interest in silver
futures contracts, essentially dumping silver on the market, silver
that does not exist, in an attempt to contain, thwart, suppress, and
manipulate the price of silver lower than it should be, and otherwise
would be.

RE:  The Sherman Act also makes it a crime to
monopolize any part of interstate commerce. An unlawful monopoly exists
when only one firm controls the market for a product or service, and it
has obtained that market power, not because its product or service is superior to others, but by suppressing competition with anticompetitive conduct.

World
silver prices are monopolized by this price manipulation that takes
place at the COMEX, and also in the London market, which is even more
heavily leveraged due to excessive selling of silver on paper that does
not exist in the real world.  Their primary product, "silver on paper"
is clearly inferior to real silver, in that the key difference is that
real silver does not depend upon the financial solvency of JPMorgan Chase & Co. for its value; and paper silver will lose all value if JPMorgan Chase & Co. goes
bankrupt.  Competition for real silver as an asset is suppressed by
their choice to sell paper silver at a discount to the costs of
delivering real physical silver, which must include shipping,
manufacturing, and mining costs.  Other popular forms of silver for
investment, such as 100 oz. bars, and 10 oz. bars, and 1 oz. rounds
also include manufacturing costs, which are also not included in their
"paper silver" investment products, such as the ETF, SLV, futures
contracts at COMEX, options on futures contracts at COMEX, and the
standard LBMA "unsecured bullion accounts".


RE: The Clayton Act
    This Act is a civil statute (carrying no criminal penalties) that prohibits mergers or acquisitions that are likely to lessen competition. Under this Act, the government challenges those mergers that careful economic analysis shows are likely to increase prices to consumers.
All persons considering a merger or acquisition above a certain size
must notify both the Antitrust Division and the Federal Trade
Commission. The Act also prohibits other business practices that may harm competition under certain circumstances.

The Clayton Act was likely violated when JPMorgan Chase & Co. acquired Bear Stearns, and inherited their short position in silver, giving JPMorgan Chase & Co. even
more control over silver market prices, due to their even larger and
more concentrated short position.  "Higher prices for consumers" is a
result if the consumers are silver investors, and if they lose the
value of their silver, and thus, have to pay relatively higher prices
for everything else in the economy as a result.

RE:
The Department of Justice also often uses other laws to fight illegal activities, including laws that
prohibit false statements to federal agencies, perjury, obstruction of
justice, conspiracies to defraud the United States and mail and wire
fraud
.

The
BIS, the Bank of International Settlements indicates that the notional
value of "other precious metals" (silver) in the "over the counter"
category increased to $203 billion by June of 2009. 
http://www.bis.org/statistics/otcder/dt21c22a.pdf

Yet,
the entire world's annual production of silver, at about 600 million
oz., at $17/oz., is barely $10 billion, which is a mere 1/20th of the
amount owed in these bullion accounts, which are dominated by JP
Morgan.  But the $203 billion of mostly silver, is 12 billion ounces of
silver, which is 24 times world annual production, and perhaps 100 to
160 times the actual supply of physical silver held in London for
delivery against such accounts, which may be as little as 75 million
ounces or less.

JPMorgan Chase & Co. is
also the custodian of the ETF, SLV, which is supposed to have up to 300
million ounces held by JP Morgan, which is also likely not there.

JPMorgan Chase & Co. is
thus likely engaged in a Ponzi scheme of selling silver to clients,
without actually purchasing the real physical silver in the
marketplace, which is a totally fraudulent and illegal activity.

JPMorgan Chase & Co. is likely engaged in sending false brokerage statements to account holders of unsecured bullion accounts, and thus, is likely engaged in both mail fraud and wire fraud. 

JPMorgan Chase & Co. is likely engaged in defrauding the United States Government
by manipulating silver prices low, by selling excessive amounts of
"paper silver", which creates the false illusion of abundance of
silver, which creates the illusion of a false sense of availability of
silver, which is likely needed by the Department of Defense for the
national security of the United States, as silver is vital and
necessary element for the defense industry.

=====

3. 
Can you give examples of the conduct that you believe violates the
antitrust laws? If so, please provide as much detail as possible.

Yes.  Andrew Maguire, a silver trader, who knows the silver traders who work for JPMorgan Chase & Co., testified to GATA, and to the CFTC in the recent hearing on March 25th, 2010. 

See
A London trader walks the CFTC through a silver manipulation in advance
By: Bill Murphy, Gold Anti-Trust Action Committee
http://news.silverseek.com/SilverSeek/1269625544.php

Andrew
provides detailed, blow by blow acts of price manipulation, giving
specifics, in real time, through emails to the CFTC about the
manipulation in progress.  His report is highly detailed.

=====

4. 
What is the product or service affected by this conduct? Where is the
product manufactured or sold, or where is the service provided?

Good
question.  The product is silver.  Real silver is sold through
approximately 4000 coin shops nationwide in the USA.  A low,
manipulated price, hurts and suppresses the business volumes of those
businesses.  Even more directly, a low silver price hurts the worldwide
industry of silver mining.  Most silver, about 75% is produced as a
by-product of copper, lead, and zinc mining.  And many primary silver
mines produce gold, copper, lead, and zinc as by-products.  Thus, a low
silver price that suppresses silver mining also restricts the supplies
of gold, copper, lead, and zinc, which leads to higher prices for all
of those other commodities than would otherwise be the case.  The world
could have more abundant, and thus cheaper, gold, copper, lead, and
zinc, which are desperately needed for the continued industrialization
of the entire world, if it were not for the silver price suppression
manipulation scheme in progress.

Silver
is primarily produced in North and South America, so this is a direct
assault on a large section of the world's economy, which is, of course,
a much smaller industry as a result.

=====

5.  Who are the major competitors that sell the product or provide the service?

The
largest refiner of silver in the world is likely Penoles of Mexico, who
may refine about 70 million ounces of silver per year, over 10% of the
world's supply.  The second largest source is likely the Cannington
silver mine owned by BHP Billiton, which produces about 30-40 million
ounces of silver per year.  The largest silver refiner in the USA is
Johnson-Matthey, who also might have been engaged in illegal allocation
of 100 oz. silver bars back in 2008, as their primary retailer had a
wait list of over 2 months for delivery in 2008 as a result of their
complicit actions in the price fixing scheme.  They refused to allocate
silver to the highest bidder at the time.  At that time, I helped
pioneer the development of a silver auction website, with the owner of
silverseek.com, who created seekbullion.com, which sold over 10,000 oz.
of silver per day to the highest bidder for a few days during a time of
a national and worldwide silver shortage that resulted from the illegal
price fixing.

=====

6.  What is your role in the situation in question?

Another
very good question.  I invested in silver, starting in 1998.  I have
been advocating silver as an investment since then, as can be seen at
silverstockreport.com, which also has an email newsletter that reaches
out to 80,000 readers.  The price manipulation has negatively impacted
the success of my own investment choice, and the investments of
hundreds of thousands of other people around the world.  I have been
working to expose this manipulation since 2002, as I wrote, and spent
over $500,000 to publicize, articles such as:

The Moral Failures of the Paper Longs Jan 22, 2003
CFTC Response to Silver Problem Jan 14, 2003
People Talking About $32,567/oz Jan 10, 2003
Letter To Authorities of Silver Markets Jan 6, 2003
Why no talk of $32,567/oz ? Jan 2, 2003
Refuting Myths about Gold Oct 28, 2002
Controlling Gold with Paper June 10, 2002
Impending Gold Futures Default May 29, 2002

7.  Who is harmed by the alleged violations? How are they harmed?

As I have said, silver investors who need to sell their silver for their retirement are primarily the ones harmed.  But also, silver mining is suppressed,
which hurts companies working to develop technology to explore for
silver.  It hurts engineers and builder who develop mines.  It hurts
and restricts the production of silver byproducts, which raises the
prices for gold, copper, zinc, and lead, which restricts industrial development worldwide

But primarily, it will catastrophically hurt holders of American dollars in the future,
as they are currently being lulled into a false sense of security about
the false and fraudulent value of US Dollars, or more accurately,
Federal Reserve Notes, which stand to lose value rapidly as the fraud
of selling silver that does not exist gets exposed.

Thus,
the silver fraud is a small part of the Ponzi Scheme on which rests the
much larger Ponzi scheme of the US Dollar itself, a $14-16 Trillion
fraud, and also, the much larger US Bond market, which may exceed
$30-40 trillion.  Further, the $70 Trillion "interest rate derivative"
fraud is also supported by silver price manipulation. 
Inflation-indexed bonds are also sold as a competing investment to
silver, and so, by hurting the silver price, or by making the silver
price seem dangerously volatile by way of direct price manipulation, JPMorgan Chase & Co. supports its entire mountain of paper investment products, which it clearly dominates in world trade.

The
silver price suppression scheme, and the resulting failure of paper
money, and the resulting collapse of commerce and world trade risks
sending the entire world into a severe depression that risks famine on
a world scale unlike what has ever been seen before in world history,
and could therefore cause the direct deaths of anywhere up to a third of all humans on earth, or even more.

Please
pause now, and reflect on that for a moment.  You may wish to consider
and ask yourself if you want that on your conscience, or if you want to
be blamed for that, by God himself, in the eternal reckoning that must
come due for all men, if you decide to do nothing to stop the fraud on
progress, that could potentially cause so much devastation.

=====

For more information, please see the following articles, or excerpts:

The Silver Boom Is Coming!
by Richard Daughty
April 6, 2010
http://www.lewrockwell.com/daughty/mogambo38.1.html

Key Excerpt:
Jeff
Nielson, writing in the James Cook Market Update newsletter, who says
that because silver kills the bacteria that causes body odor, “the use
of silver in sportswear has exploded into one of the largest single
applications of silver. This one usage already consumes more than 1,200
TONS of silver per year.”

1200 tonnes x 32,151 oz./tonne = 38,581,200 oz.

=====

Silver Short Squeeze Could Be Imminent
April 3, 2010
http://inflation.us/silvershortsqueeze.html

Key Excerpt:
NIA
believes the precious metals markets are currently being artificially
suppressed by paper gold and silver that doesn't physically exist. At
last week's CFTC hearings, Jeffrey Christian of the CPM Group admitted
that banks have leveraged their physical bullion by 100 to 1. This
means for every 100 ounces of paper gold/silver that trade, there could
be as little as 1 ounce of physical gold/silver in the vaults backing
it. However, Mr. Christian sees no problem with this because he says
"it has been persistently that way for decades" and there are "any
number of mechanisms allowing for cash settlements".

=====

Kingdom Economics Blog: Biggest Fraud in History Exposed
FED and JP Morgan Chase appear to be manipulating Gold/Silver Market
4-5-2010
http://blog.kingdomeconomics.info/2010/04/05/biggest-fraud-in-history-exposed.aspx

Key Excerpt:
What
does this mean for the future price of gold and silver? Now that this
fraud on the market has been exposed for what it is -- traders will
eventually call the bluff of the manipulators and expose their naked
short position. This could mean that the manipulators will need to find
physical gold and/or silver to cover their position. And with these
metals now being in short supply (relative to demand) we could see the
PRICE of silver and gold increase dramatically in the next few months.
Silver is currently at $17.97/ounce and gold is $1128.80.

 I
would not be surprised to see silver exceed $25 by the end of 2010 and
gold exceed $1500. And this may be just the start of the increases in
price for these metals. What we have today is psychological money and
it moves globally with the emotions of traders. Prices are artificial
(imaginary) and the market is very volatile and emotional today. Except
some ‘fireworks’ in the silver/gold markets in the near future. See
this web site for more details on this issue:

=====

Will fraud lift gold prices to $10,000/ounce?
April 03, 2010
http://www.commodityonline.com/news/Will-fraud-lift-gold-prices-to-$10000ounce-27107-3-1.html

Key Excerpt:
In
fact, there is no gold left in this world if all the Gold ETFs ask for
physical delivery. And, if that happens only god knows what will be the
gold prices in the coming months — $10000 per ounce? Maybe, even more.
Because, price of a commodity which is not available at all can go up
to any level due to the sheer fact that it is not there in the market.

Now
read about the Commodity Futures Trading Commission (CFTC) hearing last
week about a London whistle-blower who had explained to the CFTC how JP
Morgan Chase has been manipulating/capping precious metal prices. In a
shocking parallel to the inaction by the US Securities and Exchange
Commission (SEC) after receiving warnings from Harry Markopolos about
the Madoff ponzi, the CFTC has apparently been sitting on the
information on gold cartels.

Did
you visit the websites of GATA and CFTC this week? If you do, you can
see a lot of articles and responses from investors who have been keenly
watching the developments in bullion market.

=====

Gold, Silver, the CFTC & Conspiracy Theories
April 2, 2010
http://news.goldseek.com/GoldSeek/1270188480.php

Key Excerpt:
Well,
if you read the Wall Street Journal, you’ll never know what happened at
the hearing and whether the CFTC paid any attention to them, but, if
you look elsewhere, you’ll read about all kinds of interesting
developments during and after the meeting.

Here’s a partial list:

GATA’s evidence of silver and gold manipulation at CFTC hearing – Mineweb
CFTC Gets Facts of Bullion Manipulation – Numismaster
JP Morgan Chase Caught Manipulating Gold & Silver Market – Firedog Lake
Whistleblower Speaks Out On JP Morgan Market Manipulation – Jesse’s Cafe
Former Goldman Analyst Confirms LMBA Gold Market Is “Paper Gold” Ponzi – Zero Hedge
Whistleblower in Silver Manipulation Struck by Hit and Run Car In London – Jesse’s Cafe
King World Interview with Andrew Maguire the Silver Market ‘Whistleblower’ – Jesse’s Cafe
King Interview With GATA On The Biggest Gold Manipulation Story Disclosed – Zero Hedge

=====

Perhaps we all ought to submit this story to americangreed@cnbc.com ?
http://www.cnbc.com/id/22680920/

Then
again, they are about as likely to expose this story as the Russian
media was about to expose communism in government.  What's ironic is
that pravda is more likely to cover this story than the mainstream US
media.

http://english.pravda.ru/

cc:
metalshearing@cftc.gov
americangreed@cnbc.com