Class action against Morgan, HSBC specifies silver manipulation mechanism
1:30a Tuesday, December 28, 2010
Dear Friend of GATA and Gold (and Silver):
A Chicago law firm yesterday announced another class-action lawsuit against J.P. Morgan Chase & Co. and HSBC Holdings PLC complaining of silver market manipulation. Interestingly, the lawsuit cites GATA's silver market manipulation whistleblower Andrew Maguire and U.S. Commodity Futures Trading Commission member Bart Chilton, and specifies mechanisms by which Morgan and HSBC could manipulate the silver market through the use of silver exchange-traded funds.
The lawsuit complains:
"Before the Class Period began, JPMorgan had become the custodian and an authorized participant of the largest known concentration of silver bars, the iShares Silver ETF, which holds in excess of 340 million troy ounces of silver, a sum that equals an estimated 1/3 of the total present global supply of silver bullion. As a result, it had actual knowledge of the precise whereabouts of much of the world's known silver bar supply.
... Dispatch continues below ...
Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property
Company Press Release, October 27, 2010
VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:
-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.
-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.
-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.
Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.
"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."
For the company's full press release, please visit:
"In approximately March 2008, JP Morgan acquired Bear Stearns, which held a very large short position in silver. With more of the total short position in silver concentrated in the hands of JP Morgan, it had a further motive to suppress prices.
"Upon information and belief, JP Morgan works together with HSBC, the other dominant player in the silver and precious metals markets. In July 2009, HSBC became the custodian of the SIVR ETF, which meant that it had physical access to and knowledge of the silver held by that trust. Notably, it named JP Morgan as one of the sub-custodians of the SIVR ETF.
"As a result of their participation in the silver ETFs, JP Morgan and HSBC had a direct opportunity to confer and discuss with each other the prices of silver held by each of them.
"In addition, Defendants had a strong incentive to suppress downward the price of silver as measured by the NYSE-Arca and CME/COMEX instruments. For example, Defendants could pledge their silver to the ETFs in exchange for ETF shares, sell their shares to other market participants, drive down the prices of silver through trades on NYSE-Arca and CME/COMEX, buy back their ETF shares from investors at lower prices, and return their (now lower-priced) silver ETF shares in exchange for the silver bars initially pledged against those shares, the real value of which remained the same, and only notionally appears lower because of Defendants' suppression.
"With respect to Defendants' conduct on the CME/COMEX platforms, JPMorgan and HSBC's scheme has been corroborated by Andrew Maguire, a 40-year precious metals trading veteran. Mr. Maguire reported his findings to the Commodity Futures Trading Commission (CFTC), which commenced an investigation in 2008.
"On October 26, 2010, CFTC Commissioner Bart Chilton stated that there had been 'violations of the Commodity Exchange Act in the silver market' and 'fraudulent efforts to persuade and deviously control' silver prices, and that these efforts 'should be prosecuted.'"
The full complaint of the lawsuit has been posted at GATA's Internet site here:
The law firm's press release is appended.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Cafferty Faucher LLP Files Class Action Lawsuit
Against JPMorgan and HSBC Alleging Manipulation
of Silver Bar Financial Products
Law Firm Press Release
via Business Wire
Monday, December 27, 2010
CHICAGO -- Cafferty Faucher LLP (www.caffertyfaucher.com) filed a lawsuit on behalf of a class that includes purchasers and sellers of the iShares Silver Trust (NYSE-Arca SLV) and the ETF Securities Ltd. Silver Trust (NYSE-Arca SIVR) during the period March 1, 2008, through the present.
The lawsuit alleges that JPMorgan, the custodian of silver backing SLV securities and the sub-custodian of silver backing SIVR securities, and HSBC, the custodian of silver backing the SIVR securities, manipulated and suppressed the price of silver bar financial products, including SLV and SIVR, in violation of Section 9 of the Securities Exchange Act.
If you purchased or sold the iShares Silver Trust ETF or the ETF Securities Silver Trust securities during the period March 1, 2008, through the present, you may move the Court to serve as lead plaintiff within 60 days. The lawsuit, Case No. 1:10-cv-07768, was filed in the Northern District of Illinois on December 7, 2010 and is assigned to the Honorable Charles R. Norgle Sr.
The case is also brought on behalf of investors who purchased or sold CME Group Inc.'s Comex silver futures or options contracts, which are traded electronically through the Chicago-based Globex platform and through Comex. On behalf of these investors, the lawsuit alleges violations of the anti-manipulation provisions of the Commodity Exchange Act.
In addition to the claims under the anti-manipulation provisions of the Securities Exchange Act and the Commodity Exchange Act, the lawsuit also alleges that defendants violated federal antitrust law.
Cafferty Faucher LLP, with offices in Chicago, Philadelphia, and Ann Arbor, Michigan, is a national litigation firm that represents investors, businesses, and consumers who have been injured by illegal marketplace practices. Firm contact information is available at the above website. The firm has recovered tens of billions of dollars for its clients in cases targeting illegal acts and practices in a variety of industries including securities, commodities, insurance, pharmaceuticals, banking services, medical, high-tech, food and beverage, construction materials, and many others. Combined, the firm's attorneys have hundreds of years of experience working to recover losses on behalf of clients.
Contacts for Cafferty Faucher LLP:
Anthony Fata (Chicago), 312-782-4880, or Bryan Clobes (Philadelphia), 215-864-2800.
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Prophecy Drills 71.17 Metres of 0.52% NiEq
(0.310 % Nickel 0.466 g/t PGMs +Au and 0.223% Copper)
from surface at Wellgreen Project in the Yukon
Prophecy Resource Corp. (TSX-V: PCY) reports that it has received additional assays results from its 100-percent-owned Wellgreen PGM Ni-Cu property in the Yukon, Canada. Diamond drill holes WS10-179 to WS10-182 were drilled during the summer of 2010 by Northern Platinum (which merged with Prophecy on September 23, 2010). WS10-183 was drilled by Prophecy in October 2010. Highlights from the newly received assays include 71.17 metres from surface of 0.52 percent NiEq (0.310 percent nickel, 0.466 g/t PGMs + Au, and 0.233 percent copper) and ended in mineralization. For more drill highlights, please visit: