JPMorgan wins dismissal of silver price-fixing lawsuit

Mon Mar 18, 2013 5:05pm EDT

A sign stands in front of the JPMorgan Chase & Co bank headquarters building in New York, March 15, 2013. REUTERS/Lucas Jackson

A sign stands in front of the JPMorgan Chase & Co bank headquarters building in New York, March 15, 2013.

Credit: Reuters/Lucas Jackson

(Reuters) - JPMorgan Chase & Co (JPM.N) has won the dismissal of a nationwide investors' lawsuit accusing the largest U.S. bank of conspiring to drive down silver prices.

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.

The Commodity Futures Trading Commission began probing allegations of silver price manipulation in 2008, and two years later proposed regulations to give it greater power to thwart traders who try to manipulate prices.

The case is In re: Commodity Exchange Inc Silver Futures and Options Trading Litigation, U.S. District Court, Southern District of New York, No. 11-md-02213.

(Reporting by Jonathan Stempel in New York; Editing by Jan Paschal)

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Comments (3)
Venerability wrote:
Plaintiffs could never be permitted to win in this kind of a case, because it would seriously undermine the US financial system via the Alpha Bank.

But JPM, as most know, has been quietly reducing its humongous – and remember, mostly inherited – Silver Short position for quite some time now, as well as taking, say many, large Long positions in both Silver and Gold mining stocks.

Both JPM and HSBC realize they have to do better re the PM sector, because not to do so is now way too dangerous – for them and for everyone, especially since the LME has now essentially relocated to China.

There has also been, say observers, some progress at Commerzbank, inheritor of the Dread Dresdner Short.

Mar 19, 2013 5:32am EDT  --  Report as abuse
Venerability wrote:
Plaintiffs could never be permitted to win in this kind of a case, because it would seriously undermine the US financial system via the Alpha Bank.

But JPM, as most know, has been quietly reducing its humongous – and remember, mostly inherited – Silver Short position for quite some time now, as well as taking, say many, large Long positions in both Silver and Gold mining stocks.

Both JPM and HSBC realize they have to do better re the PM sector, because not to do so is now way too dangerous – for them and for everyone, especially since the LME has now essentially relocated to China.

There has also been, say observers, some progress at Commerzbank, inheritor of the Dread Dresdner Short.

Mar 19, 2013 5:32am EDT  --  Report as abuse
cooperbry wrote:
Best choice… Buy physical silver and gold and store it. Store your value outside of the banks because they are an arm of the state. Just look at Cyprus.

Mar 24, 2013 8:34pm EDT  --  Report as abuse
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