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'Serious manipulation' of gold, silver markets
Posted By Jerome R. Corsi On 05/16/2010 @ 10:18 pm In Front Page | Comments Disabled
NEW YORK – A London-based commodities trader claims a major New York bank is conducting serious manipulation of the silver and gold futures markets.
The practice has continued even after federal regulators have been warned of the impropriety, Andrew Maguire, a metals trader at the London Bullion Market Association, told WND.
Last November, Maguire brought allegations before the U.S. Commodity Futures Trading Commission, or CFTC, in Washington that gold and silver traders at JPMorgan Chase have conspired to manipulate global precious metals markets. He charged the manipulation amounts to hundreds of millions of dollars, if not billions, in institutional trading profit for the bank and personal profit for the traders.
“It’s like robbing a bank,” Maguire told WND.
Maguire charged that JPMorgan Chase gold and silver traders have coordinated massive purchases of “short contracts” betting that the price of gold or silver will go down. The purchases, he said, are part of a strategy aimed at forcing the price of gold and silver to drop dramatically at the expense of holders of “long positions” owning gold or silver.
“This is a very small community that engages in metals trading – only a handful of traders at major institutions like JPMorgan Chase,” Maguire said.
“The traders involved in market manipulation trigger their signals in advance so that local traders like me can jump on board to create a major market movement,” he said.
WND has obtained a series of e-mails Maguire exchanged with Eliud Ramirez, the head of CFTC’s enforcement unit. A copy was sent to CFTC Commissioner Bart Chilton. Maguire specified his allegations in the e-mail and predicted major market moves he believed would occur as a result of trader manipulations instigated at JPMorgan Chase.
In a Feb. 3 e-mail, Maguire predicted to the CFTC that traders were ready to initiate “a wave of short selling” designed to reduce dramatically the price of gold and of silver.
An examination of the price charts for gold and silver show both metals suffered price declines after Maquire’s Feb. 3 e-mail, exactly as he predicted.
As the market manipulation was in progress, Maguire sent additional e-mails to Ramirez at the CFTC.
“It is undoubtedly the concentrated short who has ‘walked silver down’ since Wednesday, putting large blocks in the way of bids,” Maguire e-mailed Ramirez Feb. 5. “This is clear manipulation as the long holders who have been liquidated are matched by new short selling as open interest is rising during the decline.”
Then, again later that day, Maguire e-mailed Ramirez: “A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in full control of the parties we discussed in our phone interview?”
In the e-mail, Maguire rebuked the CFTC: “It is common knowledge here in London among the metals traders that it is JPM’s (JPMorgan Chase’s) intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC’s allowing by your own definition an illegal concentrated and manipulative position to occur.”
Bill Murphy, chairman of the Gold Anti-Trust Action Committee, published Maguire’s e-mails on his organization’s website, charging, “It would not be possible to predict such a market move unless the market was manipulated.”
WND asked JPMorgan Chase to reply to Maguire’s charges.
“We have no knowledge of who Andrew Maguire is,” Brian Marchiony, a spokesman for JPMorgan Chase told WND. “We have no comment on Maguire’s charges.”
A CFTC spokesman told WND, “We do not comment on investigations.”
Signal to ‘get on board’
How does Macguire allege the insider market manipulation in the metals futures markets can be recognized?
“When suddenly, in relatively thin trading on gold or silver, you see out of the blue several hundreds, if not 1,500 contracts suddenly pop up on the sell-side, then you know that is a very concentrated position holder, not an amalgamation of orders,” he explained.
“It’s a signal to everybody to get on board on the sell-side because this is not moving a cent further on the long-side,” he said.
Maguire insisted the coordinated placement of a large number of sell-side orders could only be designed to move the price of gold or silver down. The traders coordinating the market movement would benefit from having shorted the metal at the expense of its owners, who held long positions or were purchasing futures contracts betting the price of the metal would go up.
“All the traders then had better jump on board because you’d be crazy to go against a major coordinated market move like this,” he said. “It’s like playing a fish as the traders manipulating the market push the price of gold or silver down and down and down.”
Maguire said he explained to the CFTC that “the footprints of the coordinated trading were easy to read.” He sent to the CFTC computer “screen shots” he believe proved JPMorgan was a concentrated market manipulator engaging in illegal activity designed to depress the price of gold or silver for profit.
If Maguire has shared the information with the CFTC, why did he decide to go public explaining his accusations to WND and to Murphy at GATA for publication?
“I want the CFTC to catch these guys in the act,” Maguire answered, “and I called the CFTC to alert them to market manipulations as they were happening. But now I’m concerned that the CFTC is just sitting on the information and doing nothing to investigate my allegations or bring charges.”
Maguire charged the profit made by metals market manipulators was “in the hundreds of millions, if not billions” and that the end result was the money was “being stolen from private investors who have no idea whatsoever what is going on behind the scenes.”
On March 25, Murphy disclosed Maguire’s charges in a public hearing before the CFTC, a clip of which can be viewed on YouTube.
Maguire and his wife were involved in a bizarre car accident in London, the New York Post reported March 29.
Maguire told WND he reluctantly has come to believe the car accident was an attempt on his life.
“We got hit in the side at full acceleration and tried to corral the cars in a gas station, including the guy who hit us with a commercial vehicle,” Maguire explained.
The assailant then got in his car and accelerated, hitting a number of cars as he escaped from the gas station, making the event into a hit-and-run situation.
“The police told us the assailant was known to them and even that they arrested him,” Maguire said. “But recently the police won’t say anything, and I haven’t been able to learn anything about the assailant.”
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