It looks as though the JP Morgan/HSBC silver market manipulation story has developed some serious legs after CFTC (Commodities Futures Trading Commission) commissioner Bart Chilton said yesterday that market participants have made “repeated” and “fraudulent efforts to persuade and deviously control” the price of silver.
The details are in this story that leads the Money & Investing section of the Wall Street Journal (yes, that means it’s more than just a conspiracy theory now).
The CFTC’s investigation of silver has heated up in recent weeks. The agency’s enforcement staff has circulated a packet of information to CFTC lawyers and commissioners, outlining some of its findings in the silver probe, including documents that could suggest there have been attempts to manipulate prices. In recent days, the commissioners have been discussing how to proceed in the investigation, but they haven’t made a decision.
Earlier this year, the investigation took a new twist when the CFTC began looking into allegations by a trader in London who contended that J.P. Morgan Chase & Co., one of the largest silver traders, was involved in manipulative silver trading, a person close to the situation says.
In recent months, CFTC lawyers have interviewed employees of J.P. Morgan in its metals-trading business as well as industry traders, commodity executives, experts and employees of other metals-trading firms, a person familiar with the situation says.
J.P. Morgan and HSBC Holdings PLC traditionally have been big players in the silver market. A CFTC weekly report for Oct. 19, the most recent period, shows that less than four market players hold 24.3% of all net bearish bets in the silver market. J.P. Morgan and HSBC are among those market participants, according to silver traders and a person close to the investigation.
There is a good deal of background in the report about the Hunt brothers in the 1980s and the email campaign prodding the CFTC to action, an effort that was spearheaded by silver analyst Ted Butler. Of course, both JP Morgan and HSBC declined to comment.