A solid six years ago, I published an article and got all sorts of flak for it...
A solid six years ago, I published an article and got all sorts of flak for it...
It feels good to see these crooks called out, and quite loudly in public. Shame is something missing these days. Even if these traders don't feel it, at least it is finally being heaped on them.
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Big Bankers Face Mobster Charges
[Adam English Photo] By [Adam English](
Written Sep. 17, 2019
A solid six years ago, I published an article and got all sorts of flak for it.
One side was calling me a crackpot.
The other said I was kidding myself and didn't do anywhere near enough research.
One person said I must be an idiot who lived in my mom's basement. Thanks, buddy.
And, of all the things, it was about big bank manipulation. You know that thing that was totally true.
It seems like ages ago that the LIBOR scandal evolved into, well, an everything scandal.
If you could name something banks could rig, it was happening. And, as was pretty obvious, silver was on that list.
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[If you don’t believe me, that’s fine.]( It’s hard to believe anything these days.
But I have nothing to hide. So you can listen closely to what I’m about to say, or go binge-watch your favorite shows on Netflix. [The choice is yours.](
So I wrote an article with the title "[Why Is Silver Manipulation So Absurd?]("
If you don't feel like reading old news, the idea is pretty simple. Here is the meat of it:
JPMorgan inherited a massive amount of silver shorts priced between $20 and $21 when it took over Bear Stearns. Combined with HSBC, the two mega banks covered 85% of all silver shorts.
That right there is a solid case for manipulation — because the short position was so massive compared to physical silver trading and long positions. What's worse, the U.S. Treasury created the situation.
If the free market resolved the situation, silver would have more than doubled as the short position was covered and evaporated.
The massive position was maintained for years because it wasn't easy to wind down. Any large-scale attempts to unwind the position would be countered by other big traders and result in a loss. JPMorgan didn't have to, though; it simply needed to rig the system to turn a buck.
A precious metal trader named Andrew Maguire sent detailed information in an email to the CFTC on Feb. 3, 2010, about what to expect in two days after he noticed signals from JPMorgan and HSBC traders using after-hours high-frequency trades to crush prices.
His description was perfectly accurate. The trader, selling four hundred contracts per second, dumped 45,000 contracts into the market. Each was for 5,000 troy ounces for a grand total of 7,000 tonnes. The seller then suddenly shifted and started purchasing everything he could. Still moving far faster than other traders, he or she walked with $3.6 billion.
In more recent history, JPMorgan has been holding about 25% of the silver short market with the largest eight commercial silver shorts account for 50% to 60%. Estimates put paper silver positions at 143 times the actual amount of physical silver traded.
Massive volumes of sell orders are placed and canceled in fractions of a second by them. The lower sell prices still appear in market data for anyone that cannot handle trading by the millisecond, leading to panic selling by other (much slower) traders.
The high-frequency trading system then snaps up the positions for profit. After all, they never sold anything to begin with... they simply maintained short positions and canceled sales to buy at discounts.
[Gold Could Disappear From the Ground Forever](
New gold discoveries are hitting record lows. Just the price to mine gold has skyrocketed 412% over the last decade.
With only 5% of mines actually panning out... Gold is being squeezed so much, that a price explosion is imminent.
And that’s only one reason for gold to jump... I have four more catalysts to show you. [Plus, discover the #1 gold play to make right now here.](
The government eventually threw a couple tepid charges at a couple traders. Most were dismissed, JPMorgan ate one of the charges just to avoid the higher cost of legal fees, it seemed.
And that was that, that is, until very recently.
Now, federal prosecutors are charging the head of JPMorgan's global precious metals trading desk along with two others with RICO offenses — the exact same ones used to tear down the old mafia families before tearing them apart.
Assistant Attorney General Brian Benczkowski laid it out like this, "Based on the fact that it was conduct that was widespread on the desk, it was engaged in thousands of episodes over an eight-year period — that it is precisely the kind of conduct that the RICO statute is meant to punish."
Specifically included in the charges was discussion of spoofing orders on a massive and ongoing scale and lying to CFTC officials and CME Group investigators.
Thank you, sir. It's about time.
Urgent: Amazon Owes You $1.498 Billion
Amazon has its grubby little hands in every single retail market in the world.
You can buy a bathing suit, a new book, and even food from Amazon. You need a personal sauna for your backyard? Amazon’s got you covered.
Amazon has become a one-stop shop... You can pretty much get everything you need or want, and you get it delivered quickly.
For years, it's had the entire online shopping industry in a chokehold.
And the U.S. government doesn’t like it. See, according to a little-known section of U.S. law, Amazon is now going to be forced to put over $1.498 billion straight into the pockets of everyday Americans like you...
Just to make sure it can’t get away with being too anti-competitive.
But get this: Whether the market is up or down — even if Amazon’s stock drops by 50% overnight — it is still legally obligated to make the entire payout.
And best of all, Amazon isn’t the only company required to pay you these reparations.
[Here’s the catch: You have until tomorrow to get on the distribution list.](
The thing is, it probably doesn't matter all that much. Sad but true.
JPMorgan will put up a much more serious defense this time around to counter the much more serious charges. It can outspend prosecutors 10 to 1, or 100 to 1, or 1,000, or 10,000. The sky is the limit.
Like most other prosecutions involving manipulation, if any charges stick after a jury is bored to death over weeks or months of court dates, they'll be watered down and fail to get even close to the core of the problem.
And when the dust settles, everyone else who dodged a bullet this time will go back to business as usual. Assuming they haven't already.
It feels good to see these crooks called out, and quite loudly, in public though. I'm not saying that just for me. I'm not a snowflake when it comes to some flak for what I write.
More for all of us, and not in that internet-age schadenfreude way.
Shame is something missing these days. Even if these traders don't feel it, at least it is finally being heaped on them.
Take care,
[Adam English]
Adam English
[follow basic]( [@AdamEnglishOC on Twitter](
Adam's editorial talents and analysis drew the attention of senior editors at [Outsider Club](, which he joined in mid-2012. While he has acquired years of hands-on experience in the editorial room by working side by side with ex-brokers, options floor traders, and financial advisors, he is acutely aware of the challenges faced by retail investors after starting at the ground floor in the financial publishing field. For more on Adam, check out his editor's [page](.
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