Market Watch

JPMorgan Wins Price-Fixing Lawsuit

It’s been some time now since it first came to light that JPMorgan was naked short selling silver on the market (silver they never had to begin with). With these large positions, they can drive the price down at opportune times and hold silver under key resistance levels and essentially control the market. At opportune times, they can remove those positions slowly with little harm. When silver shot up unexpectedly, they were caught with their britches down and had to begin flooding the market to allow time to un-lever. Short 40% of the net contracts, but not holding any of the physical, any rise in silver price could kill should it be called in. Hence, the noted manipulation lawsuit brought against JP a few years ago. Not to mention the out of left field margin requirement hikes which cooled off the Silver run.

Well, looks like the bad guys win this round again… Via Reuters HERE

U.S. District Judge Robert Patterson in Manhattan said the investors, who bought and sold COMEX silver futures and options contracts, failed to show that JPMorgan manipulated prices at their expense, including by amassing huge short positions that were not justified by market events at the time.

In a decision made public on Monday, Patterson said that while the investors showed that JPMorgan had the ability to influence prices, a fact the bank did not dispute, they failed to show that the bank “intended to cause artificial prices to exist” and acted accordingly.

A lawyer for the investors did not immediately respond to a request for comment.

JPMorgan did not immediately respond to a similar request.

Investors had, in at least 43 complaints filed in 2010 and 2011, accused banks of amassing hundreds of millions of dollars in illegal profit by manipulating silver prices.

After the lawsuits were consolidated, HSBC Holdings Plc (HSBA.L) was dropped in September 2011 as a defendant, leaving JPMorgan and 20 unnamed individuals as defendants.

Patterson had rejected the investors’ claims in December, but gave them one last chance to bolster their case.

The complaint had sought triple damages for what it called JPMorgan’s antitrust violations in distorting silver prices between 2007 and 2010, including through alleged “fake” trades late in the day when market volume was thin.