On March 27th the 2nd U.S. Circuit Court of Appeals said that a lawsuit brought against JPMorgan for having allegedly violated federal antitrust and commodities laws during the years 2007 to 2010 in the silver market should be dismissed.
The lawsuit alleges that JPMorgan would make fake trades when the market volume was thin and they would put on huge positions that market conditions did not justify. There were 43 complaints brought in 2010 that were consolidated into one lawsuit claiming that accused banks had made off with hundreds of millions of dollars in illegal profits.
In the lawsuit it claimed there were bankers such as HSBC and JP Morgan that specifically were out to short the market and force the price lower. In 2011 HSBC was dropped from the case and it left JPMorgan as the main defendant.
In the minds of the public they do not realize that it is not in the bank’s interest to lower the price of silver as their profit margin on trading activity would be decreased. This logical thought was pushed aside for the aforementioned more sensational accusations. The simple reason a bank would take a short position would be because they believe the market price would go lower so that they can profit from the price move. [Read more...]