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Silver subject to 'repeated attempts' to manipulate prices

Commissioner of the US futures market regulator says he believes there have been repeated attempts to manipulate the futures market.

Silver subject to 'repeated attempts' to manipulate prices

Silver markets have been subject to 'repeated attempts to influence prices', according to Bart Chilton, commissioner at the Commodity Futures Trading Commission (CFTC).

In a statement released on Tuesday he said: 'There have been fraudulent efforts to persuade and deviously control that price. Any such violation of the law in this regard should be prosecuted.'

Chilton (pictured) suggested that it would be too difficult to prove actual manipulation: 'Under existing law, to prove manipulation, the government is required to demonstrate not only specific intent; we also need to prove that as a result of the intent and market control, that activity caused an artificial price -- a point that can certainly be debated by economists.'

Instead he hoped the CFTC will attempt to prove attempted manipulation which is less difficult to prove.

'Attempted manipulation is less difficult to prove -- requiring an intent to manipulate and some overt act in furtherance of that intent. There are also other violations of law that could contort markets and distort prices,' said Chilton.

Chilton's comments come after frustrations about the lack of progress made by the CFTC on its investigations into the manipulation of the price of silver. The CFTC's enforcement division has been investigation for two years but has yet to officially report any findings.

A spokesperson for the commission said that the investigation was 'ongoing' and would not comment on the progress. He also declined to say how much access Chilton had to the investigation.

However he did confirm that the acting head of the enforcement division, Stephen Obie - who led the silver investigation - was replaced by a new acting head of enforcement earlier this month. The spokesperson said Obie had returned to the CFTC's New York office.

Veteran silver commentator, Ted Butler, whose email campaigns have forced numerous CFTC investigations into silver manipulation allegations, told Citywire: 'I'm very impressed with Chilton's comments, as it goes a long way towards restoring integrity in the CFTC. He said previously he would speak out on silver and he has held true to his word. He did so clearly and forcefully. Coming from such a high official of the primary regulator, any statement about possible or probable manipulation must be taken seriously.

'Manipulation is the most serious crime possible in the markets. That Chilton is dealing with the matter head-on is commendable. That he is raising issues that I have petitioned the agency about for more than two decades is, of course, re-assuring to me that the CFTC intends to deal with an obvious ongoing price suppression and manipulation in Comex silver market. This manipulation can be traced to the extreme concentration on the short side of Comex silver.' 

Chris Powell, secretary of Gold Anti-Trust Action committee (Gata), said: 'Gata salutes commissioner Chilton for his courage and conscientiousness and hopes that the CFTC will follow his lead in laying before the public all the available evidence of manipulation of the precious metals markets, much of which Gata itself has collected over many years.' The documentation Powell referred to can be found here.'

Earlier this month commissioner Chilton told Citywire that he intended to make a statement on silver price manipulation, stating at the time the public deserved answers.

3 comments so far. Why not have your say?

William Phillips

Oct 27, 2010 at 13:21

Silver's a soft target. There is an irrational store-of-value element in its psychology, like gold's, which makes it possible to start stampedes (either way). But it's only one-twentieth the size of the bullion market, so you don't need so much ammo when playing games with the price.

It can be deadly to your wealth, though. I remember the dreaded Hunt brothers' final push for a corner. They nearly had the price in their pocket, but nearly is never enough in these operations, and their shortfall wiped them out.

They forgot that authorities carry the biggest switchblades and can alter the rules in a heartbeat, like casino bosses escorting a too-successful punter off the premises without explanation. Maybe today's precious metal regulators should be acting a little meaner.

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Oct 27, 2010 at 19:29

I googled the CFTC and scrolled through the endless number of general counsels, assistant cousels, senior counsels, special counsels, and other lawyer types that populate the Commission. Where have all these folks been during the clearly demonstrated suppression of the spot price of silver? That's their monitor and investigate the very kind of behavior that JPMorgan, HSBC, and other money centers have been engaged in while artificially holding down the price of silver (for years!) so that the fiat paper money system could continue to function. There must have been enormous payoffs involved to hold off the attorneys from prosecuting the illegal money center shenanigans.

Because of the complicity of the CFTC in allowing the suppression of the silver price over all those years, they will stonewall any attempts to expose their ciminality. That's what attorneys are hired for. To prevent exposure of the agencie's internal crimes.

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Oct 29, 2010 at 15:36

The legal and medical professions used to be respectable - now there's only teaching left!

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