Feds Launch Probe of JPMorgan Silver Market Manipulation


"JPMorgan is insulated from potential losses [on short positions] by the Fed and/or U.S. taxpayers."

The DOJ and the CFTC have launched parallel criminal and civil investigations of JPMorgan Chase and its trading activity in the silver market, the New York Post reported Sunday.

Quoting unidentified sources, the Post reported, "The probes are centering on whether or not JP Morgan, a top derivatives holder in precious metals, acted improperly to depress the price of silver."

"The probes are far-ranging, with federal officials looking into JP Morgan's precious metals trades on the London Bullion Market Association's (LBMA) exchange, which is a physical delivery market, and the New York Mercantile Exchange (NYMEX) for future paper derivative trades."

The Office of the Comptroller of the Currency in the U.S. Department of the Treasury said JP Morgan increased its silver derivative holdings by $6.76 billion, or about 220 million ounces, during the last three months of 2009.

Sources told the Post that regulators are pulling trading tickets on JPMorgan's precious metals activities on all the exchanges as part of the investigations.

The investigation apparently was generated by allegations made by London metals trader Andrew Maguire, who contacted GATA regarding alleged rigging of the precious metals market by JPMorgan among others, through shorting the markets around key economic data releases.

In an interview with the Post last month, Maguire said, "JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the U.S. dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the U.S. taxpayers."

In a story published March 29, 2010, Mineweb's Lawrence Williams wrote, "This may be the first actual evidence of a real-time manipulation effort by one of the major players assuming the emails and statements are accurate and comprehensive."

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