RICO Suit Filed Against HSBC And JPMorgan For Silver Market Manipulation

Tyler Durden's picture

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.

More from PRNewswire:

According to the complaint, JP Morgan amassed a sizeable short position in silver futures and options in part through its March 2008 acquisition of investment bank Bear Stearns. By August 2008, JP Morgan and London-based HSBC controlled more than 85 percent of the commercial net short position in silver futures contracts.

The suit alleges that, starting in early 2008, the two banks began manipulating the silver futures market by accumulating unusually large "short" positions and then secretly coordinating enormous sales of silver futures contracts on the Commodity Exchange, which is known as "COMEX" and is part of the New York Mercantile Exchange.

According to the lawsuit, JP Morgan and HSBC used a variety of methods to coordinate their manipulation of the market for silver futures contracts, signaling when to flood the COMEX market with short positions, which caused the price of silver futures and options contracts to crash.

The suit describes two "crash" events that were set in motion by JP Morgan and HSBC, one in March 2008, and the other in February 2010, after defendants had amassed large short positions.  In the wake of both events, the suit alleges, COMEX silver futures prices collapsed.

"We believe that JP Morgan and HSBC's scheme was carefully conceived and coordinated to maximize their profits at the expense of innocent investors who believed that they were trading in a market free from manipulation," Berman said.

What is more interesting, is that the man who has achieved something a cult standing in the PM community, whistleblower Andrew Maguire, is also involved.

The complaint also contains allegations that in September 2008, the U.S. Commodity Futures Trading Commission launched an investigation that would eventually consider allegations made by a London-based independent metals trader named Andrew Maguire that the silver futures market was being manipulated.

The complaint alleges that Maguire disclosed to the CFTC on Feb. 3, 2010 that he received a signal from the two banks of their intent to drive down the prices of silver futures two days later, on Feb. 5, 2010. Maguire's information was correct and the price of silver dropped dramatically between Feb. 3, 2010 and Feb. 5, 2010.

In addition, the lawsuit states that both JP Morgan and HSBC still maintain highly concentrated holdings in short positions in silver futures and options, giving both banks the ability to continue manipulating the price of silver.

Plaintiffs' attorneys have asked the court to certify the case as a class action and enjoin JP Morgan and HSBC from continuing their alleged conspiracy and manipulation of the silver futures and options contracts market.

Attorneys also ask the court to award damages and attorneys' fees to the class.

Here is Hagens Berman internal statement on the case:

JP Morgan Chase & Co. (NYSE: JPM) and HSBC Securities Inc. (NYSE: HBC) face charges of manipulating the market for silver futures and options in violation of federal commodities and racketeering laws, according to a lawsuit filed in the U.S. District Court for the Southern District of New York.

The suit – which alleges violation of the Commodity Exchange Act and the Racketeering Influenced and Corrupt Organizations (RICO) Act – alleges that the two banks colluded to manipulate the market for silver futures starting in the first half of 2008 by amassing huge short positions in silver futures contracts they had no intent to fill, but did so to force silver prices down to their benefit.

According to the lawsuit, JP Morgan and HSBC used a variety of methods to coordinate their manipulation of the market for silver futures contracts, signaling when to flood the COMEX market with short positions, which caused the price of silver futures and options contracts to crash.

In addition, the lawsuit states that both JP Morgan and HSBC still maintain highly concentrated holdings in short positions in silver futures and options, giving both banks the ability to continue manipulating the price of silver.

Plaintiffs’ attorneys have asked the court to certify the case as a class action and enjoin JP Morgan and HSBC from continuing their alleged conspiracy and manipulation of the silver futures and options contracts market. Attorneys also ask the court to award damages and attorneys’ fees to the class.

If you have information you believe is important to the case, please contact Hagens Berman at 206-623-7292 or by e-mail at JPMorgan@hbsslaw.com.

We hope that the two firms' alleged highly illegal ongoing manipulation and intervention activities in the Precious Metal market will finally be curbed as a result of what is now sure to be a very public outcry exposing their practices.

 

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JimRogers's picture

RICO BITCHEZ!!!!!!

MilleniumJane's picture

R-R-R-R-R-R-R-R-R-R-R-R-R-R-R-R-R-R-RICOO-O-O-O-O-O-O-O-O-O-O-O-O-O-O!!!!!!!!

'Bout effin' time!

 

Bay of Pigs's picture

Nice. I'd love to see JPM burnt to the ground.

RICO Act Bitchez...

Rainman's picture

You were yanking on the rod for a long time to get this fish into the boat, TD. KUDOS !!

Gold...Bitches's picture

Sorry, but no.  The kudos go to GATA who has been on the case for a decade - they did all the heavy lifting.

Rainman's picture

....confuse is me. Thee charges against these playerz arise from a period a little over 2 years ago.

Gold...Bitches's picture

Granted, the specific companies were not specifically known until a couple years ago with the take down of Bear and congressional testimony by CFTC naming bear as the former huge short, but GATA has been all over the manipulation angle of the precious metal markets for a decade.

And people like Adrian Douglas over there have been pounding away for years on the LBMA, Fed, and the fraud.

and check this out (Dec 11, 2000): http://www.gata.org/node/4225

from the above link "Besides the BIS, the defendants include: Alan Greenspan, chairman of the Federal Reserve Board; William J. McDonough, president of the Federal Reserve Bank of New York; Lawrence H. Summers, secretary of the Treasury Department; and J.P. Morgan & Co. Inc.,

Chase Manhattan Corp., Citigroup Inc., Goldman Sachs Group Inc., and Deutsche Bank AG."

Bay of Pigs's picture

I have been friends with Bill Murphy and Chris Powell for over ten years. I met them at the Vancouver Resource Conferences (Cambridge House) and they helped me understand this issue, and got my family invested into the PM sector. We were all called "conspiracy nuts" back then. Not so much now.

LMAO.

dehdhed's picture

10 years ago silver was about 4 bucks an ounce.  i'm not sure how the prosecution would do if they claim that for 10 years they've manipulated the market with shorts all the way to 25 bucks an ounce.

i'm with ya tho, i'm a silver bull for years but i don't think i could join the class action as i wouldn't be able to prove damages.

Rainman's picture

There are spec corners going on in ALL commodities....not just PM markets. Enron famously bought up the CA electricity futures market....the first really big time swindle following the passage of the Commodity Futures Modernization Act 2000, which was just a legal cover for the U.S. domestic commodity playerz. Oil went into the game the summer of 08.....topping at $140 bbl. The off exchange, unregulated naked trading ensures cornering manipulations by non end users.....sure as night turns to day.

If this plays out like the 70's, the spec playerz will work oil ,silver, gold, coffee, and sugar in that order.......or maybe something else with high demand and capable of supply constriction .

If they could make cable TV a commodity, they'd play that too. 

DavidPierre's picture

There is no excuse for "Blatant Ignorance"!

#697432

 

My naked plug for...

Le Metropole is a 'Cafe prive'. Membership is $299.00 per year. So that you may visit, sample our fare and decide if our Cafe appeals to your taste, we would like to extend to you a "two week free get acquainted membership".

http://www.lemetropolecafe.com/guests.cfm

Bon Appetit!
Bill Murphy
Le Patron

Scout Itout's picture

Although GATA has done good work in the case for gold, It is Ted Butler who's done the heavy lifting in the case of silver! Just sayin!

Gold...Bitches's picture

yes, definitely include Butler in there as well for the silver.

DosZap's picture

Amen!!.

 THEY GATA GO!.....Uh, Bue,Bye, JPM-immy.

RICO Suave, at last a case that merits it's use....................not on protesters at clinics.

Cistercian's picture

 Re:JPM burnt to the ground...pitchforks and torches bitches!

Bill Lumbergh's picture

Can we call Jeff Christian to the stand so he can discuss his 100:1 leverage comment again.

akak's picture

Oh, you mean Jeffrey "Foot in Mouth" Christian?  Boy, talk about digging one's own grave --- that guy was even using heavy machinery for the job!  And just as well ---- that disingenuous, lying snake Christian is just as bad in his own bankster-apologist way as Jon "Gold is in a Bubble --- but NOT a Bull Market!" Nadler.

-Michelle-'s picture

1.  There's no way in hell I'd sign up for this case.  It would be like painting a target on myself.

2.  If I get one of those little cards in the mail asking me to opt in on this, I am going to be quite perturbed.

Confused's picture

That was the first thing that went through my head as well. 

Turd Ferguson's picture

Screw that. I just signed up.

Not backing down.

Kaiser Sousa's picture

TF -

thanks for man'n up...

suckers step aside & bend over....

Anton LaVey's picture

Two thumbs up.

Too bad I never bought any futures or options, only metal silver bullion, I'd join up as well.

BigJim's picture

Not sure I follow you - target for what? (genuine question)

LeBalance's picture

Predator Drone, uh, I mean...Candy Gram!

BigJim's picture

Seriously?

I mean, I can see them intimidating or even 'taking out' the lawyers and lead instigators, but everyone in a class-action suit?

The more of us that sign up, the harder it would be... I'm in.

defender's picture

The hardcore gold bugs and silver bugs expect the govt. to declare holding gold and silver illegal and then confiscating the shiny stuff to pay off their creditors.  I think that after the card in the mail they are expecting the men in black to follow with a "donation" bag.

New_Meat's picture

How can the hardcore believe that? ;-)

After all, the Supreme Court hasn't had its attempt to be packed (yet).  Just some pesky suit vs. Chief Roberts.

- Ned

Cathartes Aura's picture

genuine lol LeBalance, thanks. . .

"Candy Gram for Mongo!"

http://www.youtube.com/watch?v=fUxR965b4LU

Iam_Silverman's picture

"I mean...Candy Gram!"

Sent FedEx, from Yemen, I suppose?

DUNTHAT's picture

The FED not named as a co-conspirator??

doolittlegeorge's picture

more like "the prime suspect."  It has the added value of being true of course.  How would you like to be BB expaining to "The Prez" that, "yo, bro.  we're hittin' all our numbers.  We're just SMOKIN' this joint.  Know what i mean?"

TheMonetaryRed's picture

So you're gonna end bank "manipulation" of the gold and silver markets, huh?

Okay.

Welcome to the world of "unintended consequences".

faustian bargain's picture

BS. The world is unintended consequences. Our whole past century has been an '(un)intended consequence' of fiat monetary policy.

Gold...Bitches's picture

bankster posting?

Cuz, the unintended consequences of endless printing of fiat is far more preferable?  Or are you arguing there are none for endless printing of paper?  If so, I would counter your argument with a Voltaire and his quote on fiat...

Anton LaVey's picture

What "unintended consequences"?

Sure, CDS storm and all that. End of the [financial] world as we know it, yadda, yadda, yadda. Poverty, Crisis, Deflation, Famine and all the horsemen of the Apocalypse riding through Wall Street, etc. So what? This was coming anyway: good riddance.

Let me be clear: I want to see bankers either jump through the window from the 60th floor, or be marched off to Sing-Sing or any other MaxSecurity Federal prison for multiple consecutive life sentences without a possibility of parole. Or both: let them jump first, then let the FBI haul whatever is left to the prison to be used as manure for the flower beds.

In other words, I want these people stopped before they f*ck up the entire world again by speculating on foodstuff, oil, commodities, and everything else that can be speculated on.

"Unintended Consequences"? Au contraire, mon bon ami: these are absolutely INTENDED consequences. If this is the only way democracy and the rule of law are re-established, let all the banks burn down to the ground. So be it, I say

TheMonetaryRed's picture

Yeah, okay junkers. Have it your own way.

Just don't say I didn't warn ya!

All I know is that when you're holding an asset that's at an all-time record price, it's often not the best time to mess with some of the biggest sources of liquidity in that marketplace.

You think the banks need to manipulate silver downwards?

Silver?

Well, it's a theory.

RockyRacoon's picture

Ok, goddamit, you bitch about nothing being done.  Now something gets done and you bitch anyway.  You got a cob up yer butt?

Silver?

Yeah, silver.  Al Capone went down for tax evasion.

Tax evasion?

Yeah, it's what they could pin on his raggedy ass.

Fred Hayek's picture

Yup.  If they can only send Dimon and others away on charges of aggravated jaywalking, I wouldn't care, so long as they send them away to pound me in the ass prison.

TheMonetaryRed's picture

Whatever, guys.

I'm not saying that traders don't manipulate metals markets. Of course they do. People in the metals business have long had a reputation for being colluding, frontrunning, client-robbing, check-kiting scumbags.

Do these traders manipulate the market DOWNWARDS??? Well, not in my experience. These guys would do anything to make a buck, certainly, but the long bull trend in metals has been awfully good to them.

I admit that I don't understand all these GATA claims and whatnot and very frankly I don't try to. To me, the metals market looks the same as it always did, except worse: scumbag traders and hucksters skimming off of retail longs.

But, whatever, Goild to $1700, certainly. I'm a buyer of DGP.

Silver? It's just too small a market with too many rats. Still, you throw those rats out, a lot of money goes with them.

Johnny Dangereaux's picture

MonetaryHEAD trolling again.....

"Hold the pickles, hold the lettuce, 50 bux in time for Christmas"  That's right Have it my way bitch.

doolittlegeorge's picture

only on the downside.  What did Huggy Bear say to Starsky about his "ride"?  "U be movin' up in my book now, man."

Cojones's picture

Wouldn't that be " I know people who know people who rob people?"