CFTC

Gold and Silver • Time to give up on the CFTC

Published May 25, 2013 | By admin

Time to give up on the CFTC
by Bron Suchecki – GoldChat
Published : May 24th, 2013

http://www.24hgold.com/english/news-gol … 1668G10020

Gene Arensberg has an article out on the COMEX price smash where he concludes that:
"in order for the initial 124 tonne sale to have occurred “legally” it would have had to have been 14 traders, all with zero orders open, all acting simultaneously, all acting independently, in their own self-interest, without colluding with each other to “sell-for-effect” or conspiring to foment a price smash.

In actuality, the chances that there were 14 traders who held zero open orders all acting independently, all throwing their full allowable 3,000 contracts into the gold market within a few minutes of each other are infinitesimally small."

Gene notes that hedge members have a bona fide hedger exemption "to sell more than the limit, but not without filing paperwork with the exchange" which means that "whoever blew out the gold market on April 12 is already known to the CFTC (and what documentation they used to back up their trade)."

Now I would have thought that position limits would still apply to the person whom the hedger was executing for. A quick google search brought up this 20 page client update document from a law firm. Reading through the first few pages I was confronted by stuff like this:

"To qualify as a bona fide hedging transaction under the Final Rule, a transaction or position must (1) represent a substitute for transactions made or to be made or positions taken or to be taken at a later time in a physical marketing channel, (2) be economically appropriate to the reduction of risks in the conduct and management of a commercial enterprise, and (3) either (a) qualify as one of the eight enumerated bona fide hedging transactions under the Final Rule and arise from the potential change in the value of (x) assets a person owns, produces, manufactures, processes or merchandises or anticipates owning, producing, manufacturing, processing or merchandising, (y) liabilities a person owes or anticipates incurring or (z) services a person provides, purchases or anticipates providing or purchasing, or (b) qualify as a “passthrough swap.”"

Eyes glazing over? Same here, so I then proceeded to the scroll/skim through reading method. My lay person summary: plenty of loopholes for someone to do what they want and have the CFTC running around in circles.

Now you know why the CFTC investigation into silver has been going on for years without any result.

As I said in response to this question: Do you think Bart Chilton of the CFTC is imagining things when he says its happening, or maybe he wants to be loved by the Goldbug crowd?:

"Consider that the CFTC has to deal/manage/politic two types of market participants – producers, who want prices to be high and consumers, who want prices to be low. I have seen the theory that Bart’s role is to play to or appease the consumers, which in the case of PMs means they want high prices. I really don’t know if this is the case or he is just straight up. Either way he is often very careful in what he says, and keep in mind the difference between manipulation and suppression. Bart talks of manipulation, not suppression."

To that I’d add the CFTC has to deal with a complex set of rules and regulations. When regulations get this complex market fairness and transparency is actually harmed, and the only ones who benefit are those big enough to have lawyers able to work out the loopholes.

What the market needs is straightforward commonsense rules that everyone knows in advance, just like Kid Dynamite points out in this post on cancelling trades. Or just drop the pretence and go free-for-all law of the jungle.
Having interest rates this low doesn’t help, as speculators have minimal cost in holding a position for a long time (until it blows up) or taking on large positions. This just adds to the volatility.
Time to give up on the CFTC being able to control this, just like Ted Butler did.

BTW, Perth Mint once had a new hire in our Treasury department suggest we should trade on COMEX. That got laughed at (and that was before MF Global). We will take our chances in the OTC market, where at least we can pick our counterparties, do due dilligence on them, and trade on our terms.

Statistics: Posted by DIGGER DAN — Fri May 24, 2013 5:27 pm

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Gold and Silver • CFTC Investigating London Gold, Silver Price Fixing For Mani

Published March 14, 2013 | By admin

CFTC Investigating London Gold, Silver Price Fixing For Manipulation
Submitted by Tyler Durden on 03/13/2013 17:05 -0400

http://www.zerohedge.com/news/2013-03-1 … nipulation

BarclaysCommodity Futures Trading CommissionDeutsche BankHFTLIBORMarket ManipulationPrecious Metals

Years after the CFTC, under the leadership of Goldman’s Gary Gensler, theatrically agreed to investigate whether the price of precious metals was manipulated during trading – whether systematically or ad hoc – only to let that inquiry fizzle and drop the whole idea proclaiming there is manipulation, the commodity futures regulators are once again taking a look at shady activities originating at London. Or rather, it is "discussing internally" whether the daily London gold and silver price fixing is open to manipulation.

We are confident that this latest noble CFTC effort will be for naught: after all wholesale market manipulation like that of Libor and the energy market, is only contained to those sectors. It is preposterous and inconceivable that bankers, anywhere and especially in London, would be tempted to intervene illegally and push gold prices lower. After all, it is not like a surge in gold and precious metal prices is indicative of a loss of faith in the status quo and fiat money, and thus an embeded status quo oligarchy would have any interest in keeping precious metal prices lower. Which is why we urge the CFTC to promptly forget this latest charade, and to instead focus on much more productive things: like ignoring the creeping takeover by HFT of all commodity markets as well as complaining to Congress about its low, low budget.

From the WSJ:

The Commodity Futures Trading Commission is discussing internally whether the daily setting of gold and silver prices in London is open to manipulation, according to people familiar with the situation.

No formal investigation has been opened, the people said. The CFTC is examining various aspects of the so-called price fixings, including whether they are sufficiently transparent, they said.

Gold prices are set twice daily by five banks via teleconference, while three banks set silver prices. The fixings are then used to determine spot prices world-wide, including jewelry and sales from mining companies to refineries. The prices also help determine the value of derivatives tied to the metals.

The London gold market fix dates from 1919, and now sees twice-daily conference calls involving units of five banks: Barclays, Deutsche Bank AG, HSBC Holdings PLC, Bank of Nova Scotia and Société Générale.

Spokespeople for Barclays, HSBC and Deutsche had no immediate comment. Representatives from the other two banks couldn’t immediately be reached.

The silver fix, dating from 1897, involves Scotia, Deutsche and HSBC.

"[The fixings are] not arbitrary, it’s very much done on a demand supply basis until a price is arrived at. It’s fully transparent, it’s nothing like Libor," said a spokesman for the London Bullion Market Association, the trade organization that sets the standards for the quality of gold and silver traded in the London market, but do not run the fixings.

Well that settles that, because in a world in which any real assets are the biggest scarcity, would those who have direct and constant access to money created out of thin electrons, prefer to quietly accumulate gold, physical gold not its paper manifestations, in order to preserve their wealth, at low or high prices?

This should not be trick question.

Statistics: Posted by DIGGER DAN — Thu Mar 14, 2013 7:37 am

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Posted in Of interest | Tagged CFTC, fixing, Gold, Investigating, London, Mani, price, Silver | Leave a comment

Gold and Silver • CFTC Cuts Deal with Precious Metals Scammers

Published February 26, 2013 | By admin

CFTC Cuts Deal with Precious Metals Scammers
Tuesday February 26, 2013, 4:15am PST
By Michelle Smith – Exclusive to Silver Investing News

http://silverinvestingnews.com/15840/cf … dium=email

Four precious metals firms and three people were recently charged with engaging in illegal precious metals transactions. These activities were part of a multimillion-dollar scheme. Those initially implicated in the scam are “defendants” in a lawsuit filed by the US Commodity Futures Trading Commission (CFTC). The latest group of alleged fraudsters are mere “respondents,” to regulatory orders, as they struck deals with the regulators.

Barclay Metals and Universal Clearing were purportedly precious metals firms on Wall Street. In actuality, these corporations were operated in Florida and were never registered with the commission.
Secured Precious Metals International, a Delaware corporation that was also operated in Florida, and Secured Precious Metals Management, an actual Florida corporation, were also never registered with the commission.

The CFTC has charged these four firms and their owners with engaging in illegal off-exchange financed transactions.

Under the scheme, Barclay Metals and Secured Precious Metals International solicited a leveraged purchase program. Customers were led to believe that they could purchase silver, gold and other metals by paying as little as 20 percent of the purchase price. The remaining portion was allegedly financed by Secured Precious Metals International and Barclay. The metal was then supposedly stored on the customers’ behalf at an independent depository.

Under Dodd-Frank, financed retail commodity transactions must be executed in accordance with the rules of a board of trade, and then only by qualified parties.

In these cases, those requirements were not met, so the CFTC found them to be illegal.

Furthermore, while money was collected from customers, according to the CFTC, trades were never made. The money was instead given to Hunter Wise.

Hunter Wise refers to group of companies — and their principals — that operated as a common enterprise, according to the CFTC. Its business was supposed to be precious metals trading, but regulators allege that these unregistered entities were really “the orchestrator” of a precious metals scheme that is estimated to have brought in at least $46 million thanks to “dealers” such as the aforementioned parties who operated in Florida.

In December, the CFTC filed a lawsuit against Hunter Wise and other companies and individuals for participation in this scam. The announcement portrayed the actions in a very negative fashion, with the agency expressly alleging fraud and deception.

With regards to the latest actions, the CFTC clearly notes that the parties engaged in the same type of behavior. In addition to outlining how they intercepted money on false pretenses, the CFTC notes that “[t]he Respondents’ retail customers never owned, possessed, or received title to the physical commodities that they believed they purchased, no funds were expended by Respondents or Hunter Wise to purchase physical commodities for the customers and no physical commodities were stored for the customers.”

Yet, the acts of the those most recently implicated are portrayed in a much different light. They are not described as deceptive or fraudulent. The only time the word “fraud” is used is when describing the goals of Dodd-Frank. The regulators try to paint the main issue as the failure to comply with the trading rules — not the scamming of individuals.

The benefits of snitching

This change in presentation appears to be one of the benefits of a practice commonly referred to as “snitching.” And it not only has the ability to alter regulators’ vocabulary and focus, but also seems to have the ability to minimize the action they take.

The CFTC agreed to settle these recently announced cases without requiring any admission or denials from the respondents. The terms of that agreement prohibit the parties from directly or indirectly making public statements denying the CFTC’s findings. The parties must also agree to stop engaging in illegal activities and are barred from trading for five years.

Furthermore, they agreed to cooperate “fully and expeditiously” with the CFTC in this action and any action related to the subject matter, including testifying.

The CFTC’s orders, which do not include civil monetary penalties, acknowledge the respondents’ substantial cooperation, the CFTC’s press release states.

In the previous Hunter Wise case, which named 20 defendants, the CFTC announced continuing litigation as the agency is seeking preliminary and permanent civil injunctions and remedial relief, including restitution to customers.

David Meister, the CFTC’s Director of Enforcement, said “[h]ere is a prime example of how the Dodd-Frank Act provided the Commission with additional strong authority to go after wrong-doers, such as, as alleged in the complaint, individuals who prey on people looking to make retail investments in commodities like gold and silver. We will use this new authority to the fullest extent possible.”

Regulators have now shown they can pick and choose when they will stand behind those words. That certainly cannot be encouraging for those who have long waited for the CFTC to take a stand against major firms who are believed to be manipulating the precious metal markets.

Securities Disclosure: I, Michelle Smith, hold no direct investment interest in any company mentioned in this article.

Statistics: Posted by DIGGER DAN — Tue Feb 26, 2013 11:27 am

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Gold and Silver • ALERT: CFTC Goes After CME(CRIMEX)!

Published February 22, 2013 | By admin

ALERT: CFTC Goes After CME(CRIMEX)!

Here’s an interesting bit of news out of the CFTC…

CFTC Charges CME Group’s New York Mercantile Exchange and Two Former Employees with Disclosing Material Nonpublic Information about Customer Trades
http://www.cftc.gov/PressRoom/PressReleases/pr6519-13

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed an enforcement action charging the New York Mercantile Exchange, Inc. (CME NYMEX), which is owned and operated by the CME Group, and two former CME NYMEX employees, William Byrnes and Christopher Curtin, with violating the Commodity Exchange Act and CFTC Regulations through the repeated disclosures of material nonpublic customer information over of period of two and one-half years to an outside commodity broker who was not authorized to receive the information.

We’ll see how this plays out but it looks like "business as usual" at the COMEX is Ending! This bodes well for the criminals at the CME to be brought down with JP Morgan in the silver scandal.

Again, this topic was touched upon in this week’s Road Trip…

Friday Road Trip 2/22/2013 (Members)

http://www.roadtoroota.com/members/1113.cfm

Gold and Silver • CFTC Commissioner Jill Summers is OUT!

Published January 25, 2013 | By admin

Commissioner Jill Sommers Announces her Resignation

http://www.cftc.gov/PressRoom/PressReleases/pr6502-13

Breaking news that CFTC Commissioner Jill Summers is OUT!

This is a MAJOR win for the Good Guys as she was a major Road Block in passing the Position Limits Regulations!

Washington, DC – Today, Commissioner Jill Sommers made the following statement:

“As I prepare to leave the Commodity Futures Trading Commission I would like to acknowledge the hard work and dedication of my fellow Commissioners and the many talented staff with whom I have had the pleasure of working for the past five years. While many challenges remain in finalizing the implementation of the Dodd-Frank Act, I have every confidence that the American public will be well-served by their continuing efforts.”

###

Last Updated: January 24, 2013

Statistics: Posted by DIGGER DAN — Fri Jan 25, 2013 2:12 am

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Gold and Silver • Ted Butler gives up on the CFTC and wants all commissioners

Published May 26, 2012 | By admin

Ted Butler gives up on the CFTC and wants all commissioners out

http://www.gata.org/node/11414

Submitted by cpowell on Sat, 2012-05-26 00:16. Section: Daily Dispatches

8:12p ET Friday, May 25, 2012

Dear Friend of GATA and Gold:

Writing today at GoldSeek’s companion site, SilverSeek, silver market analyst Ted Butler, who exposed the silver price suppression scheme so many years ago and has kept at it ceaselessly since then, gives up on the U.S. Commodity Futures Trading Commission, which, he says, lied in its previous investigation of the silver market and is lying now as its current supposed investigation nears its fourth year of nothing. Butler calls for the resignation of all CFTC members.

We’re not quite as disappointed in the CFTC as Butler is, as the commission’s inability to produce anything honest or intelligent about silver after nearly four years is as good as confirmation that the silver price suppression scheme is essentially a U.S. government operation, like the gold price suppression scheme. Those with eyes to see and ears to hear can figure this out pretty easily now.

Butler’s commentary is headlined "Illegalities" and it’s posted at SilverSeek here:

http://www.silverseek.com/commentary/illegalities

Illegalities

Theodore Butler
|
May 25, 2012 – 4:22pm

http://www.silverseek.com/commentary/illegalities
.
The Commodity Futures Trading Commission (CFTC) has been negligent in failing to terminate the obvious manipulation ongoing in silver. Furthermore, the agency may be complicit in this manipulation. Worse, it has lied to the public and elected officials. This all goes back to the time when Bear Stearns was taken over by JPMorgan in March of 2008. It is well known that Bear Stearns went under as a result of a sudden loss of liquidity amidst a run by creditors and customers. What is not well known is that those problems were greatly exacerbated by a $2 billion margin call on silver and gold short positions from the end of December 2007 to March 2008. I believe the silver and gold margin calls were at the heart of Bear Stearns’ failure.

We know now (from CFTC correspondence to lawmakers in 2008) that JPMorgan took over Bear Stearns’ giant silver and gold short positions on the COMEX. Up until that time, we did not know that Bear Stearns was the concentrated silver and gold short. Using Commitment of Traders Report (COT) data, Bear Stearns had a COMEX silver short position of no less than 35,000 net contracts and a COMEX gold short position of no less than 60,000 net contracts from the end of December 2007 to their takeover by JPMorgan two and a half months later. From December 31, 2007 to mid-March 2008, the price of silver rose by $6 (from $15 to $21) and the price of gold rose from $850 to over $1000. Based upon the number of contracts held short by Bear Stearns and the price movement at that time, that resulted in margin calls of $2 billion. I would contend that was the real reason for Bear Stearns’ demise.

So where do I get off claiming that the CFTC is complicit in the silver manipulation and lied about it to the public and to lawmakers? This is easy to prove. On May 13, 2008, the CFTC published a 16 page public response to my allegations of an ongoing manipulation in silver by means of a concentrated short position. The response was based upon silver market activity through the end of 2007, thereby conveniently sidestepping the drama that occurred through March 2008 when the biggest silver short in the market, Bear Stearns, failed and needed to be rescued with taxpayer assistance (Federal guarantees given to JPMorgan). The May 13, 2008 report from the CFTC went into great lengths in explaining there was nothing amiss on the short side of silver, even though the Commission knew that two months before the report was issued, the biggest concentrated short had failed and needed to be rescued by taxpayers. A lie by omission is no less of a lie.

Why am I bringing this up now? Because I’ve had enough of the CFTC’s lies and its refusal to do its job. As a result of the transfer of Bear Stearns’ concentrated short position becoming visible in the August 2008 Bank Participation Report the Commission initiated another formal investigation of the silver market, this time by the Enforcement Division. This investigation is now 3 years and 9 months old, the longest-running investigation in U.S. Government history. It has lasted longer than most wars. Just as with the two prior investigations by the Division of Market Oversight, the current investigation is a phony investigation. I say this because there has been no attempt by the Enforcement Division to contact me or anyone claiming that silver has been manipulated. It’s clear that the agency does not want to get to the truth. The agency keeps initiating investigations which involve time and taxpayer money, but they never check with the person who has caused them to investigate in the first place.

Only two of the five commissioners currently serving at the agency were at the Commission when JPMorgan took over Bear Stearns or when the Enforcement Division began its current investigation. But all have received vastly more public complaints about silver than for any other commodity. None of them can claim ignorance of the issue. Chairman Gensler preaches about the need for transparency in our markets. How about some transparency for the Commission? The Commission lied in its May 13, 2008 report (by omission) and is lying now when it claims to be conscientiously investigating silver. See my article from 2009.

http://www.investmentrarities.com/ted_b … 1-09.shtml

The stalled investigation has only served as cover for the crooks at JPMorgan and the CME to manipulate the price of silver more egregiously than ever before. I think it’s time to press for the removal of all current commissioners, including Gensler and Commissioner Chilton. Who wants to hear platitudes when a serious crime is in progress? Clearly, the Division of Market Oversight lied in its 2008 letter and the Enforcement Division is lying now. Who needs public servants like these?

Please send this article to your Congressman or Senator and ask them to investigate. Also please e-mail the Commodity Futures Trading Commission with your comments.

ggensler@cftc.gov Chairman Gensler

bchilton@cftc.gov Commissioner Chilton

jsommers@cftc.gov Commissioner Sommers

Somalia@cftc.gov Commissioner O’Malia

mwetjen@cftc.gov Commissioner Wetjen

dmeister@cftc.gov Director

Statistics: Posted by DIGGER DAN — Sat May 26, 2012 2:13 am

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American • Criminal Neglect and Corruption at the CFTC

Published April 5, 2012 | By admin

Criminal Neglect and Corruption at the CFTC
Bix Weir

OPEN LETTER TO THE CFTC

April 5, 2012

Commodities Futures Trading Commission

3 Lafayette Center

1155 21st St. NW Washington, DC 50581

Re: Flawed Investigations and Breaking The Law

ATTENTION CFTC COMMISSIONERS AND STAFF:

I have written the CFTC many letters attempting to explain the obvious ongoing manipulation in the silver market because you clearly could not figure this out on your own. In each one of these letters I laid out the case of who was doing it, how they were doing it and why as well as a way to fix the situation. Yesterday the CFTC announced it has fined JP Morgan $20M for "Unlawfully handling Customer Segregated Funds"…

CFTC Orders JPMorgan Chase Bank, N.A. to Pay a $20 Million Civil Monetary Penalty to Settle CFTC Charges of Unlawfully Handling Customer Segregated Funds

http://www.cftc.gov/PressRoom/PressReleases/pr6225-12

This letter was intended to be a congratulatory letter to the CFTC for FINALLY going after JP Morgan but upon reading the order again I have changed my position. Here’s why…

"CFTC order finds that from at least November 2006 to September 2008…"

"As of November 17, 2006, JPMorgan included LBI’s customer segregated funds in its calculation of LBI’s net free equity, even though these funds belonged to LBI’s customers, not to LBI, the order also finds."

"…on September 15, 2008, Lehman Brothers Holding, Inc. filed for bankruptcy. Two days later, LBI requested that JPMorgan release LBI’s customers’ segregated funds. JPMorgan improperly declined the request"

ARE YOU KIDDING ME?! The CFTC has sat on this obvious illegal activity for over 4 years without doing anything about it?! WHAT WERE YOU DOING FOR FOUR YEARS?! In the meantime the customers of MF Global had their lives destroyed by the very actions that JP Morgan had taken years earlier! Who really deserves the blame – the criminals or the regulators who didn’t do their jobs?

SHAME ON YOU FOR BEING COMPLETELY INCOMPETENT!

No, this is beyond incompetence…this is criminal neglect by the CFTC and you should all be sent to jail for colluding in the corruption!

Read your own summary paragraph in the press release…

"The laws applying to customer segregated accounts impose critical restrictions on how financial institutions can treat customer funds, and prohibit these institutions from standing in the way of immediate withdrawal," said David Meister, the Director of the CFTC’s Division of Enforcement. "As should be crystal clear, these laws must be strictly observed at all times, whether the markets are calm or in crisis."

That "AS SHOULD BE CRYSTAL CLEAR" comment incriminates your behavior. It IS crystal clear but the CFTC purposefully decided to delay this enforcement action for four years! The MF Global debacle was not only avoidable it was a direct result of the CFTC’s decision not to ENFORCE any laws related to large, "too big to fail", banking interests. As a matter of fact, an ex-Director of the CFTC Enforcement Division, Dennis Klejna, was the principle approver of the transfer of segregated customer funds from MF Global to JP Morgan. And the icing on the corrupt cake is that he had already been found "guilty without pleading guilt" in an almost identical fraud at REFCO!

JP Morgan Lawyer Exposes Corruption at JPM, MF Global & the CFTC

http://www.roadtoroota.com/public/855.cfm

So what now? The CFTC has clearly demonstrated that there will be no regulations enforced against large banks in the United States. All there is at the CFTC are incompetent bureaucrats that shuffle behind their bankster bosses creating new laws and rules after the fact and never to be enforced.

The next debacle is going to be in the Silver Market. WE ALL WARNED YOU YEARS AGO! Go ahead and shut your eyes, ears and mouths to the silver manipulation but YOU will be shown as fools once again.

Our Founding Fathers are rolling in their graves.

Signed…One Disgusted Citizen -

Bix Weir

www.RoadtoRoota.com

VIA EMAIL TO: ggensler@cftc.gov; bchilton@cftc.gov; mwetjen@cftc.gov; somalia@cftc.gov; jsommers@cftc.gov; jriley@cftc.gov; dberkovitz@cftc.gov; hhardman@cftc.gov; rshilts@cftc.gov; vmcgonagle@cftc.gov; pcela@cftc.gov; ssherrod@cftc.gov; dmeister@cftc.gov

Statistics: Posted by DIGGER DAN — Thu Apr 05, 2012 12:59 pm

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International News • CFTC Charges Royal Bank of Canada

Published April 3, 2012 | By admin

CFTC Charges Royal Bank of Canada with Multi-Hundred Million Dollar Wash Sale Scheme

http://networkedblogs.com/vWxat?a=share

The CFTC apparently is not staffed well enough to suitably investigate $1.5 billion in client theft from MF Global, or alleged market manipulation in silver by JP Morgan, but it has plenty of resources to go after the Royal Bank of Canada for ‘wash trades’.

Apparently the CFTC springs to life when the alleged theft is against the US tax man (IRS) rather than measly US citizens.

From the CFTC:

CFTC also charges that bank concealed material information from, and made material false statements to, a futures exchange
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a complaint in federal district court in New York charging the Royal Bank of Canada (RBC), a Canadian bank and financial services firm doing business in New York, with conducting a multi-hundred million dollar wash sale scheme in connection with exchange-traded stock futures contracts.

The CFTC’s complaint also alleges that RBC willfully concealed, and made false statements concerning, material aspects of its wash sale scheme from OneChicago, LLC (OneChicago), an electronic futures exchange, and CME Group, Inc. (CME Group), the entity that exercised the regulatory compliance function for OneChicago.

From at least June 2007 to May 2010, RBC allegedly non-competitively traded hundreds of millions of dollars’ worth of narrow based stock index futures (NBI) and single stock futures (SSF) contracts with two of its subsidiaries that RBC reported as “block” trades on OneChicago. The CFTC’s complaint alleges that RBC’s NBI and SSF trading activity, which accounted for the majority of OneChicago’s volume during the relevant period, constituted unlawful non-competitive trades, wash sales and fictitious sales.

Specifically, according to the CFTC’s complaint, RBC’s NBI and SSF trades were not negotiated at arm’s length between the counterparties to the trades, as required by law, but were instead designed and controlled by a small group of senior RBC personnel acting on RBC’s behalf. The trading scheme was allegedly designed as part of RBC’s strategy to realize lucrative Canadian tax benefits from holding certain public companies’ securities in its Canadian and offshore trading accounts.

Prior to each trade, RBC allegedly identified stocks in U.S. and Canadian companies that RBC believed would generate a tax benefit. RBC and a subsidiary allegedly bought and sold these stocks, and also bought and sold NBI or SSF futures contracts written on the stocks opposite each other. According to the complaint, RBC’s futures trading was conducted in a riskless manner that ensured that the positions, profits and losses of each RBC counterparty washed to zero, in disregard of the price discovery principles of the futures markets, which resulted in a financial and position nullity for RBC while allowing it to reap the tax benefits.

In addition, the CFTC’s complaint alleges that, from at least January 2005 to April 2010, RBC unlawfully concealed material information from, and made false statements to, CME Group concerning RBC’s SSF trading activity. Specifically, the complaint alleges that when RBC purported to describe the trades to CME Group, RBC falsely stated that its SSF trading was conducted at arm’s length between the counterparties to the trades, and concealed the fact that the trading strategy was created and managed by a group of senior RBC personnel acting on RBC’s behalf. In addition, the complaint alleges that RBC concealed from CME Group the fact that it had intentionally designed its stock futures trading strategy to exclude non RBC-affiliated parties from RBC’s futures trades.

“A fundamental purpose of the futures markets is to provide an arm’s-length mechanism for market participants to discover prices and shift risks associated with products traded in those markets,” said David Meister, the Director of the CFTC’s Division of Enforcement. “As we allege, RBC not only designed and executed a wash sale scheme that undermined that purpose, it went a step further and misled the exchange into believing that its conduct was lawful. Today’s action should make clear that the CFTC will not hesitate to bring charges against even the most sophisticated market participants who unlawfully exploit the futures markets for their own gain.”

In its continuing litigation, the CFTC seeks civil monetary penalties and a permanent injunction against further violations of the Commodity Exchange Act and the CFTC’s Regulations, as charged.
The following CFTC Division of Enforcement staff members are responsible for this case: Susan Gradman, David Slovick, Lindsey Evans, Joseph Rosenberg, Joseph Patrick, Scott Williamson, Rosemary Hollinger and Richard Wagner.
Media Contacts
Dennis Holden
202-418-5088

From CFTC.gov
Posted by The Doc at 5:46 PM

Statistics: Posted by DIGGER DAN — Mon Apr 02, 2012 10:20 pm

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Gold and Silver • Sprott and Morgan Respond to CFTC Commissioner Chilton

Published March 20, 2012 | By admin

Eric Sprott and David Morgan Respond to CFTC Commissioner Bart Chilton on Silver Manipulation

http://networkedblogs.com/vlIIi?a=share

Silver industry experts Eric Sprott and David Morgan take on the silver manipulation controversy, and discuss Bart Chilton’s recent comments regarding silver in his interview with Jim Puplava.

In a "virtual" roundtable with Jim Puplava, Eric Sprott of Sprott Asset Management and David Morgan of Silver-Investor.com each respond to excerpts from Jim’s earlier interview with CFTC Commissioner Bart Chilton on silver price manipulation.
Click here for full Financial Sense interview with Eric Sprott and David Morgan

For those who missed the Bart Chilton’s comments regarding commodities manipulation in an interview with FoxBusiness last week, the commissioner’s interview can be seen below:

Statistics: Posted by DIGGER DAN — Tue Mar 20, 2012 2:28 pm

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Gold and Silver • CFTC: Flawed Silver Investigations and Breaking The Law

Published February 20, 2012 | By admin

CFTC: Flawed Silver Investigations and Breaking The Law
Bix Weir

OPEN LETTER TO THE CFTC

February 16, 2012

Commodities Futures Trading Commission

3 Lafayette Center

1155 21st St. NW Washington, DC 50581

Re: Flawed Investigations and Breaking The Law

Dear Commissioners:

For over 2 decades a large group of silver investors have been yelling and screaming at the CFTC to stop the rampant downward manipulation of the COMEX silver market. On May 14, 2004 the CFTC released the results of their 1st investigation by Michael Gorham, Director of Market Oversight, saying they have not found any evidence of silver market manipulation.

http://www.cpmgroup.com/free_library1/C … y_2004.pdf

Dr. Gorham, who once worked at the Federal Reserve Bank, resigned only 3 weeks after releasing this report:

http://www.cftc.gov/opa/press04/opa4935-04.htm

As a truly REMARKABLE twist of fate, or not, Mr. Gorham now serves on the Probable Cause and Business Conduct Committees of the CME who were supposed to be overseeing MF Global before it imploded:

http://www.marketswiki.com/mwiki/Michael_Gorham

Then in May 2008 the CFTC released another report on the same topic stating again that the silver market was not being manipulated. This time the CFTC decided NOT to put anyone’s name on the report:

http://www.cftc.gov/ucm/groups/public/@ … rt0508.pdf

This report piggy backed off the 2004 report in reinforcing the main argument why there was no manipulation in the silver market…

"Staff in 2004 also examined the relationship between NYMEX silver futures prices and cash market silver prices to determine whether NYMEX prices appeared to be unusually or significantly out of line with cash prices."

"NYMEX silver futures prices tend to track closely the price of physical silver…This analysis shows that there is not a downward bias in the NYMEX futures price vis-a-vis the LBMA price, which, as noted, is widely regarded as the benchmark value in the marketplace."

In BOTH reports the CFTC cites the "cash prices" as the prices for silver on the London Bullion Market(LBMA). It is absolutely important that the NYMEX (COMEX) prices stay in line with the "cash prices" of silver otherwise it would prove that the futures and options trading was SETTING the price for physical silver which is illegal. The PROBLEM with the CFTC’s analysis is that they are comparing the NYMEX prices to a massively flawed proxy for the price of physical silver.

I’d like to direct your attention to the CFTC hearing on the silver market manipulation issue. Jeffery Christian of the CPM Group points out clearly that the LBMA really has NOTHING TO DO WITH THE "PHYSICAL MARKET" IN SILVER.

http://www.bullionbullscanada.com/index … Itemid=114

As a matter of fact Mr. Christian points out that the physical silver related to LBMA contracts amounts to only 1/100th of the silver market. This is supported (and even vastly understated) by the MASSIVE volumes traded daily and annually on the London Bullion Market in excess of 50B ounces per year (NET!) when annual global mine production is only 550M oz. The TOTAL VOLUME of yearly trades on a gross level is likely 5x this number or 250B oz.

The argument used twice by the CFTC that silver cannot be manipulated because this price matches the "physical price" as determined at the LBMA is patently absurd.

Now we come to the 3rd investigation into the manipulation of silver that began over 3 years ago that still has no resolution. We have supplied a whistle blower (Andrew McGuire), new regulatory authorities (Dodd-Frank Law), an admission by a CFTC Commissioner that manipulation has transpired (Bart Chilton) and a silver price that relentlessly continues to rise without any significant decrease in the concentrated short position held by a small handful of banks or even one single bank.

WHAT MORE DO YOU NEED?

On January 17, 2010 the CFTC was required BY LAW to implement position limits in the COMEX silver market. This date was not a suggestion by Congress but a hard fact of law. On January 18, 2010 the CFTC was in full violation of this law. I submit that the current CFTC Commissioners, Summers and O’Malia, who have blocked the implementation of position limits at every turn should be removed from their post immediately. The actions of the CFTC have baffled the "free market" and leaves market participants standing dumbfounded with a very simple question…

Under what legal authority does the CFTC have the ability to disobey the laws of the US Congress?

Our patience with the CFTC has long gone. We have endured 2 botched silver investigations, one NEVER ENDING silver investigation that should have been a slam dunk and now the blatant violation of Federal Law all the while silver market participants are being ROBBED DAILY BY CRIMINALS ON THE COMEX after making the very sound decision to invest in silver.

If you are unaware of the facts behind silver please review the following article:

Melt The Witch

http://www.roadtoroota.com/public/136.cfm

This travesty of justice must end immediately.

Do your job or stand down and let someone more capable take over.

Bix Weir www.RoadtoRoota.com

Statistics: Posted by DIGGER DAN — Mon Feb 20, 2012 4:55 am

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Posted in Of interest | Tagged Breaking, CFTC, Flawed, Gold, Investigations, Silver | Leave a comment