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

Tyler Durden's picture

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trading screens; "spoofing" is the submission of a large order which is not executed but influences prices and is then withdrawn before it reasonably can be executed.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?

Full filing:


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TheGreatPonzi's picture

As I said, those investors don't know who they are attacking. The case will be rejected by all courts on the US territory. Attacking the gold/silver cartel is attacking extremely powerful interests, including Rothschild's ones (

malusDiaz's picture

Who will be on the Front lines of war?


Support those brothers & sisters who are willing to fight against tyranny! 


Some day you WILL die.

TheGreatPonzi's picture

I do support them, but don't forget that the whole US system is crooked, including the courts. If this complaint leads to JPM and HSBC conviction, then it would be fantastic. This case will be a test of the honesty of the US justice.

Bob's picture

This particular action is a civil case, so there definitely won't be any criminal conviction.  We'll see about award or, more likely regardless of merits, a settlement between plaintiffs and banks.  

DoChenRollingBearing's picture

The thread hereby puts out an Urgent Message to Sr. VP at JPM JonNadler!

Jamie D must be up late tonight very worried, use that confidential phone number he gave you...

Told you not to fire Johnny Bravo!

Rick64's picture
Commodity Futures Trading Commission judge says colleague biased against complainants

zaknick's picture

Justice? What effing justice??  What a farce.


Rodney Stich

Drugging America: A Trojan Horse

LoneStarHog's picture

I guess you didn't get the memo several YEARS ago (circa 2006) that The House of Rothschild is completely OUT of the precious metal's business.

TheGreatPonzi's picture

Muhahahaha. Do you really believe that?

PS: Rothschild is not a company, it is a family. And even if this family doesn't intervene directly in the markets, it doesn't mean her interests have faded away.

LoneStarHog's picture

They are known as The House of Rothschild.  Yes, they exited the market in 2006.  That is not to say that they own no physical metals.

Habspurg's picture

Lord Jacob Rothschild, 4th Baron Rothschild, is on the board of BullionVault.

weinerdog43's picture

Ha!  +1 for "The __________" movie reference.  Well done.

breezer1's picture

the rothschilds were buying gold according to a telegraph article several months ago.

tmosley's picture

The key difference is that now they are long, rather than short.

DoChenRollingBearing's picture

I am happy to walk in the footsteps of Giants as an owner of gold. ("FOFOA-speak")

Arius's picture

if you noticed Rothchild got out of London pool in 2004...someone else got to hold the bag...but you know where this train is is NOT west doesnt matter what they tell you....

High Plains Drifter's picture

The question is , just who is holding the gold plated tungsten bars? Hmmm, that is the question. I bet we have a lot of them in Ft. Knox because we have been such good clients.

Unlawful Justice's picture

Nothings changed to make me think other wise.

There has to be some self-preservation motive to see any change.

Their all in this together, but i think there shit'n their pants.

Fear of truth/reality is an uncontrollable emotion.

Nostradumbass's picture




It is not a spelling issue.

Milestones's picture

Correct!! Retired English teacher??      Milestones

Al Gorerhythm's picture

No, just another witness to the end result of the public school system.

ReeferMac's picture


LOL! Sadly, you're right! I'm regularly amazed at the content spewed forth by those alleged to have successfully completed our educational system.

Brutlstrudl's picture

At days end, the silver has to be in the warehouse. case closed

boooyaaaah's picture

If the precious metal market is manipulated ---- then gold bug pumpers --- are accomplices or accessories to the crime.

I wonder if the fed and the treasury are in cahoots with JPM ---- maybe they are going to teach the unwashed how the game of commodities is played



At law, an accomplice is a person who actively participates in the commission of a crime, even though they take no part in the actual criminal offense. For example, in a bank robbery, the person who points the gun at the teller and asks for the money is guilty of armed robbery. However, anyone else directly involved in the commission of the crime, such as the lookout or the getaway car driver, is an accomplice, even though in the absence of an underlying offense keeping a lookout or driving a car would not be an offense.

An accomplice differs from an accessory in that an accomplice is present at the actual crime, and could be prosecuted even if the main criminal (the principal) is not charged or convicted. An accessory is generally not present at the actual crime, and may be subject to lesser penalties than an accomplice or principal.

chopper read's picture


China now holds just a bit more than 1000 tonnes of gold in reserve and that the US holds just a bit more than 8100 tonnes, Meng said


Doubtless if the Yuan is to become an international currency like the dollar or the EUR, China has to get a huge gold reserve to support it and a reserve of 1054 tonnes is far from being enough.


The article went on to note that China needs only to use one tenth of its current dollar holdings in reserve to bring its gold holdings to parity with the US even with gold at $1300/ounce. We note also that Ms. Yi Gang, the head of SAFE (the rather aptly named State Administration for Foreign Currency), said earlier this month that China could add gold to its reserve position but would do so only “prudently,” rather  than aggressively. Nonetheless, Mr. Meng’s article shall raise gold’s profile all things being otherwise equal.


High Plains Drifter's picture

I wonder how many of those gold bullion bars they have drilled holes in?

StychoKiller's picture

To what purpose?  Transmogrifying them into sponges to sop up "excess liquidity?"

dark pools of soros's picture

"become an international currency like the dollar or the EUR, China has to get a huge gold reserve to support it"


Burnsy's picture

Lifting their reserve holdings to 10%, the world CB average, would equate to about 7000 tons at current prices. Meaning 2,5-3 times last years total production. China will not go about this by buying large amounts through the central bank. Rather, they will continue to encourage their growing middle class to accumulate gold (as they are already) and thus lift their total gold holdings. This asian middle class accumulation is underestimated. Their culture is very much tuned towards saving in precious metals, but they have had periods where they haven't been allowed to. This could be a slow, heavy tide of demand. I will certainly be accumulating alongside these good "folks" (look! I can be as down to earth as the politicians!)

chopper read's picture

i love it.  you can't go wrong referring to "folks". 

anyway, some anectdotal evidence from conversations here at the CBOT.  rumor has it (from a trader whose father is in the mining business down in South America) that China is going directly to gold mining countries for the purpose of developing new mines with reserves that will never see the open market but rather be acquired directly by the Chinese Central Bank. 

...sneaky, sneaky, sneaky.  :) 

66Sexy's picture

yup we should all bend our knees and confess rothchild is lord of all.

Troy Ounce's picture


This attack of the investors goes to the heart of the confidence game of the Ponzi system.

Note that you, I, judges, Congress men, bankers, business men and women i.e. all of us, have reaped the benefits of the Big Ponzi by buying cars, houses, holidays, etc. Actually, we had fun, didn't we?

Now, after 40 years of cheap money, La-la-land will come to an end and an adjustment of 80-90% MUST come. Our only problem is we don't know when.

Our esteemed investors are fighting the last ray of hope that the wealth of our society is not imaginary, but real. They are attacking all of us.

But let's get it over with. Burn it down and have a fresh start.



AGORACOM's picture

Short $JPM, long SLV

It is getting harder and harder for Wall Street / Elite manipulators to fight the masses who have had enough.  If you hate lawyers, this is the time to love them.  From mortgages to silver, they are going to lead the fight.

Only a matter of time before GATA / Ron Paul and others are proven right with respect to gold market manipulation.


George ... The Greek .... From Canada

Minion's picture

Been short since the explosion to the downside last week.  :)

boooyaaaah's picture

Maybe George already knows that

Maybe George is a salesman working for JPM

When JPM pulls out the rug then George will be rich

JLee2027's picture

Avoid SLV, get physical silver only.

Rahm's picture

Physical is money, and nothing else!

XitSam's picture

The lawyers are not doing this because they are pure of heart.  They are doing it for their cut of the settlement if they win.  

Oh, and how long does anyone think this suit will take? I would say 18 months before it even goes to trial. A lot can happen in the meantime.

Unlawful Justice's picture

Sharks eating sharks,

A real shark-fest gladiator arena.

Mutual destruction sequence..................... commence.

Sharks smell fear, but can they smell the their own fear?


CPL's picture

No one in here will see the end of it, because it will be simplely forgotten when the first shots are fired by some loon and the war starts.'s picture

The lawyers are not doing this because they are pure of heart.  They are doing it for their cut of the settlement if they win.


Are we to assume that you refuse payment for services you render?

XitSam's picture

Of course not, but their cut will probably be 40% of hundreds of millions, while the members of the class get a pittance, like a 10% discount on the next 5 oz bar purchased.  See the tobacco settlement. A lawyer should get his full hourly rate, not a percentage.

i-dog's picture

"I would say 18 months before it even goes to trial."

Au contraire. I'd suggest the defendants will offer a handsome early settlement before too much discovery is conducted.

OTOH, while lawyers jump at settlements, well-heeled plaintiffs sometimes prefer to force a public trial for reasons other than financial gain.

XitSam's picture

No argument the defendants will try mightily to settle. As a class-action, I don't think the lawyers are free to cut any deal they want. I think everyone should join the class and vote for trial.

tmosley's picture

You do know that JPM and HSBC are the custodians for SLV, right?  I'm thinking this is going to bankrupt those two firms, and their vaults will be found to be empty, or at least double sold, at which point SLV is going to do a nose dive while physical silver bores a hole straight through the moon, Looney Toons style.