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HSBC dropped from silver price suppression lawsuit

Section: Daily Dispatches

By Gregory Meyer
Financial Times, London
Wednesday, September 14, 2011

HSBC has been dropped from a lawsuit accusing banks of suppressing silver prices after reaching a temporary standstill agreement with plaintiffs' attorneys.

The London-based bank's removal leaves JPMorgan Chase as the lone defendant named in the case brought by dozens of silver investors and money managers.

A vocal group of US silver investors maintains that bullion banks for years kept silver prices artificially low by holding massive short, or selling, positions in New York futures and options markets. Regulators twice found no evidence to support their claims.

... 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:

The Commodity Futures Trading Commission in September 2008 disclosed that it was investigating misconduct in the silver market. The probe has not led to government charges.

However, last October, CFTC commissioner Bart Chilton took the matter into his own hands, announcing that "there have been fraudulent efforts to persuade and deviously control" silver prices.

Silver traders afterwards filed more than 40 lawsuits against HSBC and JPMorgan, based in part on the banks' historically large portfolios of precious metals derivatives.

This week plaintiffs' attorneys consolidated the suits into a single complaint and sought class-action status in federal court.

HSBC was omitted as a defendant in the amended complaint, made public on Wednesday, after entering into a "tolling agreement" with plaintiffs, the filing said. Such agreements extend the deadline for bringing lawsuits under US statute of limitations rules.

"A potential defendant may sign a tolling agreement with a plaintiff either because there are settlement discussions between the parties, or because the plaintiff is reviewing whether or not that party should actually be sued in the case," said Peter Haveles, partner with law firm Kaye Scholer, who is not involved in the silver litigation.

HSBC acknowledged that the complaint made reference to a tolling agreement but declined to comment on the suit. "We will continue to vigorously defend ourselves in this area through all proper legal channels," the bank said.

The complaint alleged that JPMorgan, on various occasions between 2007 and 2010, manipulated silver markets with "large, uneconomic sales to depress prices." Plaintiffs said the bank intentionally drove silver futures lower "through large volume trades and 'spoof orders.'"

By mid-2008, after JPMorgan had acquired the investment bank Bear Stearns, the value of its silver position increased at least $100 million for each $1 per ounce decline in silver futures prices, the complaint said. In August 2008, the plaintiffs alleged, JPMorgan used "massive selling power" to force traders of put options to cover their positions.

JPMorgan said: "These allegations are entirely without merit and we intend to defend ourselves vigorously."

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Lewis E. Lehrman on How to Solve the U.S. Debt Problem

Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program.

Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust.

Lehrman says: "Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy. We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals, and working people 0 percent at the bank, you are not going to encourage them to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust."

To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: