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GATA lawsuit publicized in German newsletter

Section: Daily Dispatches

11:33a EDT Saturday, December 16, 2000

Dear Friend of GATA and Gold:

Thanks to GATA member Barrie Walsh for being
our public relations agent on the latest story
about our lawsuit with Reg Howe: a big story
in today's edition of WorldNetDaily.

The word is getting around, in part because of
GATA members themselves. Help us spread the

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Gold price manipulation?
Lawsuit accuses officials, banks of
conspiring to suppress metal market

By Jon E. Dougherty
December 16, 2000

Lawyers for the Gold Anti-Trust Action Committee have
filed suit against five investment houses, an i
nternational bank, and top officials of the U.S.
Treasury Department and Federal Reserve Board for
quot;conspiringquot; to suppress the price of gold. According
to GATA officials, the suit -- filed Dec. 8 in U.S.
District Court in Boston, Mass. -- charges defendants
with quot;anti-trust violations, securities fraud, and
breach of fiduciary duty,quot; as well as charging
government officials with exceeding their
constitutional authority to regulate commerce and the
U.S. economy.

The suit was filed by Reginald Howe, a lawyer and gold-
market analyst, as well as a consultant to GATA. He is
also the founder of Golden, a website
quot;devoted to gold market commentary.quot;

The suit alleges that the investment houses -- Chase,
JP Morgan, Deutsche Bank, Citibank and Goldman Sachs --
as well as U.S. officials and the Bank for
International Settlements quot;have been at the center of a
scheme with central banksquot; and investment firms quot;to
coordinate the sale of gold and gold derivatives to
keep the price of gold low and thereby disguise
inflation and weakness in the U.S. dollar.quot;

Howe said the Bank for International Settlements, or
BIS, is improperly attempting to pay its private
shareholders far less than fair value for their shares
as it moves to rid itself of private investment and
replace those shareholders with shares owned by
international financial institutions.

The charges leveled by GATA in the Howe lawsuit are not
new. As WorldNetDaily reported in May 1999, the group
alleged that gold price manipulation was taking place,
perhaps to de-emphasize the precious metal's stature as
a valuable commodity.

quot;Entire nations, such as Great Britain, are poised to
release hundreds of tons of gold into the market over
the next few years in a move some believe is an attempt
to artificially deflate gold prices and possibly to de-
emphasize gold as a valuable commodity,quot; WND reported

Because of what it viewed as suspicious market activity
in the face of high gold demand and low gold supply --
a classic quot;supply-and-demandquot; equation that usually
triggers a price increase -- GATA was, even last year,
contemplating a suit quot;aimed at breaking up the alleged
control over gold market prices.quot;

In his legal action, Howe claims the Bank for
International Settlements -- which owns a quot;substantial
amount of goldquot; (reports say 192 tons) -- is planning
to cancel shares of its stock currently in private
hands quot;so that the bank might become owned entirely by
member governmentsquot; who may also have an interest in
suppressing the price of gold.

quot;I've been a trader for 25 years and I began noticing
that the gold market was just not trading the way it
was supposed to,quot; said GATA Chairman Bill Murphy, in an
interview last year. He said that when gold reached the
$295 to $300 per ounce range, quot;I began noticing that
the market price for gold would always stop ( at a
certain level), lose, then come right backquot; to the
previous level -- but never higher.

That didn't follow the established rules of supply and
demand, he explained.

For its part, BIS has denied the allegations made in
the suit, calling them baseless.

quot;The BIS is aware of the lawsuit ... and the BIS
considers the lawsuit without merit,quot; bank spokeswoman
Margaret Critchlow told Reuters last week.

BIS is known as the central bank to the world's central

Other gold traders and industry leaders had little to
say about the GATA suit. A spokesman at Blanchard and
Co., -- the country's largest rare coins and precious
metal's dealer -- had not heard of the GATA suit.
Neither had officials at the Gold Information Network.

And at least one industry expert, who asked not to be
identified, said GATA itself lacked credibility as an

On the other hand, gold expert Jim Sinclair, according
to, called the Howe-GATA lawsuit quot;the most
positive gold development in 21 years.quot;

Beyond the accusations and denials, though, are
distinct indications that many Western nations -- at
least on the surface -- appear to be moving away from
using gold as the guarantor of their currencies.

Besides Great Britain, the Swiss National Bank is
looking to dump hundreds of tons of its gold. The bank
has commissioned the BIS to help sell 1,300 tons of
gold -- or about half of Swiss gold reserves -- quot;under
a plan for coordinated gold sales agreed upon by 15
European central banks last year,quot; Reuters reported

The Dutch central bank has also unloaded what it deemed
quot;excess goldquot; recently via BIS.

Both Howe and Murphy remain convinced there is
manipulation taking place. And they believe there is
some panic within the industry -- especially when gold
prices manage to spike before they are eventually
brought back under control.

Also, Murphy says a number of investment houses are
quot;shortquot; tons of gold -- meaning they have loaned out
money ostensibly backed by gold that hasn't even been
mined yet.

Howe said his lawsuit will seek to quot;stop the Treasury
Department and the Fed from intervening in the gold
market and to stop the investment houses from
manipulating the price of gold.quot; Also, he said he is
asking the court to quot;issue an order to the BIS to
compensate its private shareholders fully,quot; and to pay
quot;damages against all the defendants for fixing the
price of gold.quot;