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Was The August 13th Gold And Silver Plunge A JP Morgan “Spoof”?
from Silver Doctors:
Are the banks continuing to spoof gold & silver, even as they’re being investigated and having their traders arrested?
by Chris Marcus via Arcadia Economics
There have been more recent arrests by the Department of Justice in their precious metals investigation. And when you consider the timeline, it’s interesting to wonder whether JP Morgan or other banks are actually continuing to “spoof” and manipulate the price of gold and silver. Even while they’re simultaneously being investigated and having their employees arrested!
Christian Trunz was working as an executive director at J.P. Morgan up until August 20th when he “pleaded guilty to criminal charges of manipulating the precious metals markets for nine years”.
The CNBC article by Dawn Giel also mentioned that like the other 2 traders who have already pleaded guilty to “spoofing the market” (one is a former JP Morgan employee, and the other worked for Scotia Capital and Bear Stearns – which was taken over by JP Morgan), he “admitted learning the illegal trading tactics from senior traders at the bank and to using those tactics with the knowledge and consent of supervisors.”
All three of the articles about the arrests mention that it was a widespread practice at the traders’ firms, and that it was done with the knowledge of their supervisors. So this wasn’t just some rogue junior traders. This was being condoned from a higher level. And given that Trunz was actually still working at JP Morgan when he was arrested, was he, his colleagues, his supervisors, or his peers at some of these other banks responsible for what happened to the silver and gold prices only a week earlier on August 13?
When the price of both metals spiked downward, at the exact same time, on no known news or fundamentals that I, or any of the other silver experts that I regularly interview on my show have been able to identify.
(chart courtesy of kitco)
(chart courtesy of kitco)
Now if you’re wondering what “spoofing” actually means, the article mentions that “in his guilty plea, Trunz admitted that from approximately July 2007 and August 2016 he placed thousands of orders that he did not intent to execute for gold, silver, platinum and palladium futures contracts.”
In one of the other cases, “Corey Flaum (the former Scotia Bank and Bear Stearns trader) during his guilty plea admitted that from approximately June 2007 and July 2016 he placed thousands of orders to manipulate the prices of gold, silver, platinum and palladium futures contracts according to the Justice Department.”
So they were placing trades they didn’t intend on executing in order to manipulate the price. Which former CFTC commissioner Bart Chilton, who oversaw the agency’s investigation into silver manipulation, also elaborated further on in the interview I did with him earlier this year.
Chris Marcus: You mentioned spoofing. And I’m curious, because my understanding of how some of the manipulation has occurred is that if silver is trading $20.05, there are a lot of stop orders placed around the $20 handle. And often, if the price can get pushed a little bit, then you get a lot of those high frequency algorithms kicking in, and you see a drop, with many feeling that the people nudging the price a little, are the same ones buying it back lower.
Does that sound like a reasonably accurate portrayal to put it in perspective for folks? Or would you phrase it differently?
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