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Why is JPMorgan Above the Law? – Ted Butler
by Theodore Butler, Silver Seek:
Recent developments indicate, almost beyond question, that when it comes to silver (and gold), JPMorgan is operating in direct violation of the law. So clear is the proof of this allegation that the only real question is why JPM is allowed to openly flaunt basic commodity and antitrust law? Before getting to the why, let me first establish that JPMorgan is, indeed, violating the law when it comes to silver and gold.
JPMorgan is the largest and most important bank in the US and many would consider its CEO, Jamie Dimon, to be not only the most respected voice in banking, but in the corporate world as a whole. Given its high profile, JPMorgan is closely monitored and analyzed. Despite this coverage, very few know that JPMorgan is the dominant force in silver and gold markets. Yet public data demonstrate that JPMorgan has come to dominate the derivatives and physical sides of silver and gold, particularly since acquiring Bear Stearns in early 2008.
There are two final arbiters in matters of commodity and antitrust law in the US. The federal commodities regulator, the Commodity Futures Trading Commission (CFTC), is responsible for resolving civil infractions in regulated futures trading and the Department of Justice, is the final adjudicator for interstate commodity matters on both a civil and criminal basis.
In regards to the CFTC, the public record indicates the agency was involved in investigating and reviewing allegations of a silver price manipulation on multiple occasions both before and after JPMorgan took over Bear Stearns and it became the largest short seller in COMEX silver and gold futures in March 2008 and would remain so until the present time. The agency began a five-year formal investigation of a potential COMEX silver manipulation in September 2008 that ended inconclusively five years later. Any involvement by JPMorgan in potentially manipulating the silver market was never mentioned by the CFTC, as is typical government policy.
However, a recent interview with Bart Chilton, a CFTC commissioner at the time of JPMorgan’s acquisition of Bear Stearns and front line witness to JPM’s ascension to the role of most dominant COMEX silver short seller, basically confirmed that the agency was in a running battle at the time to get JPMorgan to reduce its excessive silver short position. The CFTC’s efforts to get JPMorgan to reduce its manipulative short position were unsuccessful, both at the time and for the following eleven years. Sadly and shockingly, Chilton passed away weeks after his interview of a natural cause he had to know would shortly end his life. There can be little doubt that Chilton wanted to go on the record about JPMorgan and silver before his coming certain demise. There is now a written transcript of Chilton’s last interview with Chris Marcus –
https://arcadiaeconomics.com/silver-manipulation/bart-chilton-on-jp-morgan-and-silver-manipulation/
A measured review of the public record and Bart Chilton’s last interview leaves little doubt that the CFTC (accompanied with interest and involvement from the Justice Department at the time) tried and failed to rein in JPMorgan from excessive and manipulative short selling in COMEX silver staring in 2008. Emboldened by its success in rebuffing CFTC and Justice Department efforts to limit its short selling in COMEX silver (and gold) futures contracts to manipulate prices to be artificially depressed, JPMorgan embarked on a new strategy in early 2011, namely, to begin to accumulate as much physical silver and gold as it could to take advantage of the low prices it created by excessive futures short sales.
While clearly illegal, JPMorgan’s new strategy proved phenomenally successful over the next 8 years to the present time. All told, JPMorgan has acquired 850 million ounces of physical silver and somewhere between 20 to 25 million ounces of physical gold since early 2011, at an average price of $18 in silver and $1200 in gold. At current prices, JPMorgan is about even to a bit ahead on its combined physical silver and gold holdings, down on silver and up on gold. Good luck to those trying to find these holdings on JPMorgan’s books, as it is the undisputed master at hiding assets. Besides, the $40 to $50 billion worth of JPM’s combined silver and gold holdings are less than 2% of its total assets of $2.5 trillion+ . More remarkably, JPMorgan has continued to profit from COMEX futures trading, never once taking a loss, always profits, over the past 11 years.
On November 6, 2018, it looked like the Feds had finally caught up with JPMorgan, when the Department of Justice announced it had unsealed a criminal guilty plea from a month earlier by a former precious metals trader from the bank for manipulating prices in the COMEX futures contracts from 2009 to 2015 and that it was involved in an ongoing investigation. The announcement indicated that the trader had conspired with other traders at the bank and, in fact, learned to manipulate from other traders at the bank and did so with his supervisors’ knowledge.
Given the timing of the press release from the DOJ, it had to have been investigating COMEX precious metals by traders from JPMorgan for well over a year through today. I know that this is not a matter expected to be resolved within days or weeks, but price manipulation is the most serious market crime of all and the sad fact is that despite the guilty plea and announcement of an ongoing investigation, JPMorgan has continued to manipulate the price of silver and gold since the announcement, as well as continue to accumulate physical silver. Therefore, it appears highly unlikely that the Justice Department intends to truly crack down on JPMorgan, since the manipulation is still in effect.
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