Following up on Silver-Gate (see this morning's post) comes this news...
JPMorgan Chase & HSBC have been hit with two lawsuits by investors who accused them of conspiring to drive down silver prices.
The accusation is that these two banks manipulated the market for COMEX silver futures and options contracts from the first half of 2008 by amassing huge short positions in silver futures contracts that are designed to profit when prices fall.
The lawsuits were filed one day after the Commodity Futures Trading Commission proposed regulations to give it greater power to thwart traders who try to manipulate prices. The CFTC began probing allegations of silver price manipulation in September 2008.
As we mentioned this morning, CFTC Commissioner Bart Chilton has publicly stated that there had been "fraudulent efforts to persuade and deviously control" silver prices.
Earlier this year, the CFTC began looking into allegations by a London trader that JPMorgan was involved in manipulative silver trading.
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