One Of The World's Largest Silver Miners Slams The CFTC About Silver Market Manipulation

Tyler Durden's picture

It has long been known to silver market watchers that when it comes to the price of paper silver, there has long been a chronic and extremely concentrated shorting presence at the Comex, one which the CFTC has persistently refused to address even though it consistently surpasses the proposed limits on derivative positions. Now, at long last, a Canadian silver miner, First Majestic Silver Corp., has decided to take the CFTC to task.

In a letter penned by Ted Butler to CFTC Chairman Tim Massad (who recently replaced former Goldmanite and future US Treasury Secretary, Gary Gensler), Keith Neumeyer, CEO of First Majestic, became the first primary silver producer to vocally highlight some of the questionable activity reported weekly in the CFTC's Commitment of Traders report, specifically the "record position change of more than 28,200 net contracts of COMEX silver futures" the equivalent of 141 million ounces of silver and 61 days of world mine production. Incidentally, this was first observed here one week ago.

Neumeyer observes accurately that the "big changes in positions on the COMEX are by speculators and commercials acting as speculators and not by those engaged in bona fide hedging" and comments that "such massive speculation in COMEX silver futures may not be in keeping with the spirit and intent of commodity law and may suggest something is wrong with the price discovery process, since real producers and consumers of silver don't appear to be represented."

Neumeyer concludes that such moves in the futures market "appear from the outside to be manipulated practices by a concentration of players."

Don't hold your breath for a response, however. Recall that less than two years ago, under the aegis of Bart Chilton who is currently a handsomely paid lobbyist at DLA Piper on behalf of the HFT lobby after spending years bashing them while at the CFTC, the commodity regulator closed its "investigation" concerning manipulation in the silver market, without finding anything:

CFTC Closes Investigation Concerning the Silver Markets


Washington, DC – The Commodity Futures Trading Commission (CFTC or Commission) Division of Enforcement has closed the investigation that was publicly confirmed in September 2008 concerning silver markets. The Division of Enforcement is not recommending charges to the Commission in that investigation. For law enforcement and confidentiality reasons, the CFTC only rarely comments publicly on whether it has opened or closed any particular investigation. Nonetheless, given that this particular investigation was confirmed in September 2008, the CFTC deemed it appropriate to inform the public that the investigation is no longer ongoing. Based upon the law and evidence as they exist at this time, there is not a viable basis to bring an enforcement action with respect to any firm or its employees related to our investigation of silver markets.

Curiously, this investigation took place during a time when the CFTC, as it publicly admitted recently never even looked at spoofing activity in the precious metals markets, which also explains why two days ago, another Indian scapegoat (the third in a row after Navinder Sarao and Nasim Salim), one Himanshu Kalra was busted for spoofing gold and silver in the period between March 1, 2012 and October 31, 2012 - a span of time which was covered by the CFTC's grand silver manipulation which concluded in September 2013, and yet which the CFTC completely failed to notice.

And yes, in a non-banana republic, a regulator so humiliated would be forced to at least reopen its "investigation" and admit that it was wrong and has missed glaring examples of market rigging, but in the US that won't happen.

Which is also why while we salute First Majestic with this first public appeal by a corporation to the CFTC to stop the rigging in the silver market, we have absolute certainty that this too complaint will promptly end up in Mr. Massad trash never to be heard from again.

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Salah's picture

does anyone have a clue...just the slighest clue, how much silver is sitting in the vaults of the Mexican central bank?

(that they do not have to report)

Manthong's picture

Yeah, like the CFTC is going to go to the FED and tell them to stop giving JPM free money for a perpetual term and take off their shorts.

Pladizow's picture

Guess who OSHA, the EPA and the IRS will be visiting!

Big Corked Boots's picture

They're a Canadian company with mines in Mexico. Although all my bars (before the boating accident) said Northwest Territorial Mint.

nope-1004's picture

Problem here is that silver and gold are money, always have been, always will be.  What FM is doing is actually penning a letter voicing concerns over the USD being propped up, not silver manipulation.

Which is why this will go nowhere unless, and until, the USD is replaced or devalued.

REAL Money in competition with FED notes means real money is going to be controlled, as FED notes are a political (and MIC) whim.

Soul Glow's picture

Gee I wonder which will win - the longest reigning champ of money GOLD or the new school fiat dollar.  The dollar has 50 years under its belt and gold has a lifetime.


CPL's picture

Whoever sets the price of the PM of course.  Right now an ounce of gold is a used central air unit and silver is two pounds of medium ground beef because that's what it can buy.

remain calm's picture

Where can I get that coin? I want 100 of them

philipat's picture

Read the CFTC statement carefully. It does NOT say there was no wrongdoing, just that there was no LEGAL basis for action. In other words, if JPM was acting as an Agent for The Fed/ESF/PPT that would NOT be an illegal act because these bodies are above the law and are specifically authorised to intervene in any market for the purposes of "stability". Even if that means bakrupting the Miners.......

Bunghole's picture


My new 14 SEER A/C and 96% gas furnace (gotta convert to R410A non-chlorinated refrigerant) ran $6,800 with new gas service.

To replace the failed heat pump and stay on the old R-22 refrigerant and old furnace would have ran $2,500, but R-22 will no longer be produced after 2020.  Thanks Montreal Protocal

I aint selling Au or Ag to pay for it though.


inhibi's picture


LMAO. Maybe just use health? Jesus, where do these CEO/Presidents come from....

CPL's picture

When the bottom falls out, that's the price of the PM until someone states otherwise.  Even then, the coinage is mostly stamped with a value well under the market rate.  Again, you would have to find a retailer after the effect to do the exchange that would honour YOUR faith in the value of Au or Ag.  Only one tribe cares enough about shiny metal.  I doubt that particular tribe will be around to any great effect once it happens.  And it will happen just like every other time in history.  Probably the exact same way like the other 9000 cases on record.

Retail exchanges as history show for anyone NOT nobility or a conqueror all revolve around barter, never cash.  In the case of a failed democratic republic, doubly so.  The collapse of Rome had little to exchange once it's IOU's amounted to nothing gained.  It lost England to it's mercenary contractors.  The celts, gauls, germanic, slav and goths repossessed their lands nearly the instant that money that wasn't worth anything in terms of use...even though it was gold and silver.  Most of the European tribes nearly instantly reverted back to exchange based community cartels once the economic system once used was no longer useful.

Just the way things go and a common re-occuring theme of "modern" western civilization.

Deathrips's picture


Theres a big pile of agreements that say theres that physical silver? Thats the point...who knows?

Is somone selling somthing that they dont own? I cant do that.



actionjacksonbrownie's picture

When I buy PM's, I always use my bank debit card. EVERY TIME I make a PM purchase, my bank calls me the next day to "confirm" that I really made this purchase.


                                                                       EVERY FCKING TIME


I usually buy from the same (reputable) company, but not always, but that seems to be irrelavent - it's the fact that I am buying PM's that gets the banks knickers in a knot. They have NEVER contacted me to confirm a purchase or payment regarding anything else - only PM's.

...out of space's picture

dude that is not realy wise, try buy some pm anonymously with cash.

NoWayJose's picture

You can bet that your transactions are being recorded somewhere for possible money laundering.  After thinking it through, I don't mind bank confirmation as much as I would mind a hacker running up charges on my account.  When I buy PMs online I usually place the order and send a check or money order to the PM dealer.  At least it is somewhat harder to track.

actionjacksonbrownie's picture

Laundering money from my bank account??? If I was laundering money, I would be purchasing with cash. And checks and money orders are all recorded by the bank, so debit purchases are recorded a little more quickly, but that's about it. I won't argue the idea of a hacker using my debit info, but that is insured by the bank, so hack away.


Debit is fast, easy, and I LOVE the idea of exchanging electrons for PM's - I laugh every time.

l1b3rty's picture

Probably should be reported on some more, Mexico's silver.


They keep their mouth shut about the historical precious metals manipulation.

youngman's picture

The playing with paper has destroyed the physical markets in anything...its a game now....and the biggest player wins..

CPL's picture

Correct, faith always runs out when what's delivered isn't what was asked for.  It's looking like unilateral failure on everyone's behalf regardless of 'size'.

KnuckleDragger-X's picture

You have to be a member of the elite insiders to win in the metals market, too bad the regular people are only there to give away their money.....

Peak Finance's picture

I am doing ok swing trading NUGT, JNUG & their inverses, buying some phy with the winnings. 

exi1ed0ne's picture

Bullshit.  As long as physical is available for purchase, AND YOU TAKE DELIVERY, you will win the game. 

Spitzer's picture

Warren Buffet did a number on it in the 90's

JustObserving's picture

If a market is not controlled by a corrupt, criminal cabal, then that market is not in the land of the free.  US controls global financial markets with corruption, fake data, infinite spying backed up by an iron fist of the military while pretending to espouse free and fair markets.  All rating agencies are instruments of US foreign policy as are all US bansk, brokerages and corporations

Show me a free market or an honest regulator or an honest bankster or, heaven forbid, an independent economist in the land of the free.

American Financial Markets Have No Relationship To Reality

As we have demonstrated in previous articles, the bullion banks (primarily JP Morgan, HSBC, ScotiaMocatta, Barclays, UBS, and Deutsche Bank), most likely acting as agents for the Federal Reserve, have been systematically forcing down the price of gold since September 2011. Suppression of the gold price protects the US dollar against the extraordinary explosion in the growth of dollars and dollar-denominated debt.

Russia and China starting their own rating agency to fight US domination:

Russia and China: Watch Out Moody’s, Fitch and S&P, Here We Come!

June 1, 2015


The rating agencies are a major pillar of dollar dominance post 1971 and important instrument of US foreign policy - Russian-Chinese move to found its own represent a major new development and challenge to established global financial order

Lore's picture

Now watch First Majestic experience a bomb threat, a mine incident, some other kind of intimidation. You tow the mafia line or else. It's the new American way: control, manipulate, defraud, deceit...

Big Corked Boots's picture

What took these guys so long?

And where are their teeth? Letters and press releases aren't good enough...

Osmium's picture

Too bad they are not in a position to close the mine for a bit.  Let the supply dry up.

bbq on whitehouse lawn's picture

They could always open their own exchange. Set the buy price at what mineing costs are and get their silver that way. They could also use that silver to pay the shareholders with. Or hire a private army of unemployed who will take silver as payment. Once you have an army then other options open.

litemine's picture

That would be expensive, if you were to cast Silver Bars and Ship (courier) with insurance Dividends in Physical Form.

Then neighbours, mailmen/women and others could find out......Locked Cabinets

Beware......."Security Breach" then amounts could add up.....Bigger Safes


oddjob's picture

No appreciation for the job Keith Neumeyer has done making Silver available to those who want it?...there's your teeth, use them as you wish.



Moe Howard's picture

A letter. That should change everything. Finally.

SoilMyselfRotten's picture

I can think of 2 letters i'd like to send the manipulators, FU

moonman's picture

unfortunatley it does not go far enough, say for instance....

a strongly worded letter.


now that would open some eyes

F0ster's picture

Silver Producers should FIGHT BACK by threatening to hold back the supply of physical from the market. At the very least counter the shorts with press releases from a Silver Producer Consortium that they may or may not be doing so to influence the traders and counter manipulation. Silver spot is priced by parasites it should be priced by producers.

Kreditanstalt's picture

The governments support the present price discovery system and need this manipulation to continue.  The "regulators" are an arm of those governments.

Xibalba's picture

WHY, praytell, would the author of this article refer to a shill organization like the CFTC as a 'regulator'?  I thought you guys were informed?!?!  They are ENABLERS OF FRAUD and PATSYS. 

Omega_Man's picture

Canada, Mexico, Russia, and other producers must refinance mines in these nations and then refuse any of their metal to be sold on Comex or US run markets. 

litemine's picture

Excuse me but "What" ?

Are you quoting something?

bigkahuna's picture

could not find this round at teir web site:

where can we buy this?

Stanley Kubrick's picture

First Majestic's had this positionon on price-rigging for years.

Which is why I buy perdiodically from them, not that their prices are great, but they're one of the only silver miners that haven't sold their soul to the devil bankers.



NeedtoSecede's picture

Before the boat capsized, I had also bought some silver from FM.  If you catch it at the right time, you can buy it at a fair price.  Now that I see these guys at least taking even a token stand, I may buy some more from them this summer.  It is only a letter, but it is more than a lot of miners are doing.  I hope they don't have any "accidents" in the near future.

Mike Honcho's picture

Dear Keith,



Bay of Pigs's picture

He is very late to the party.

The late Adrian Douglas had the paper fraud nailed in 2011, and the GATA boys knew it was happening way back in 1998 via JPM and Barrick Gold.

Ajax_USB_Port_Repair_Service_'s picture

Go ahead and short silver. One day you will get your just reward. Limit UP! Oh nooooooo!

Fun Facts's picture

It's about time the minertards start saying something before they're all working at McDonalds.

The silver mining industry lost several billion dollars last year, because the malevolent bankster cabal feels threatened by actual money.