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Additional
Statement by Bill Murphy, Chairman
Gold Anti-Trust Action Committee
to
the U.S. Commodity Futures Trading Commission
Washington, D.C., March 25, 2010
On
March 23, 2010, GATA Director Adrian Douglas was contacted by a whistleblower
by the name of Andrew Maguire. Maguire is a metals trader in London. He has
been told first-hand by traders working for JPMorganChase that JPMorganChase
manipulates the precious metals markets, and they have bragged to how they
make money doing so.
In
November 2009 Maguire contacted the CFTC enforcement division to report this
criminal activity. He described in detail the way JPMorgan Chase signals to
the market its intention to take down the precious metals. Traders recognize
these signals and make money shorting the metals alongside JPM. Maguire
explained how there are routine market manipulations at the time of option
expiry, non-farm payroll data releases, and COMEX contract rollover, as well
as ad-hoc events.
On
February 3 Maguire gave two days' warning by e-mail to Eliud Ramirez, a
senior investigator for the CFTC's Enforcement Division, that the precious
metals would be attacked upon the release of the non-farm payroll data on
February 5. On February 5, as market events played out exactly as predicted,
further e-mails were sent to Ramirez while the manipulation was in progress.
It
would not be possible to predict such a market move unless the market was
manipulated.
... Dispatch continues below ...
In an e-mail on February 5 Maguire wrote: "It is common knowledge here
in London among the metals traders that it is JPM's intent to flush out and cover
as many shorts as possible prior to any discussion in March about position
limits. I feel sorry for all those not in this loop. A serious amount of
money was made and lost today and in my opinion as a result of the CFTC's
allowing by your own definition an illegal concentrated and manipulative
position to continue."
Expiry
of the COMEX April call options is tomorrow, March 26. There was large open
interest in strikes from $1,100 to $1,150 in gold. As always happens month
after month, HSBC and JPM sell short in large quantities to overwhelm all
bids and make unsuspecting option holders lose their money. As predicted by
GATA, the manipulation started on March 19, when gold was trading at $1,126.
Last night it traded at $1,085.
This
is how much the gold cartel fears the CFTC's enforcement division. They thumb
their noses at you because in more than a decade of complaints and 18 months
of a silver market manipulation investigation nothing has been done to stop
them. And this is why JPM's cocky and arrogant traders in London are able to
brag that they manipulate the market.
This
is an outrage and we are making available to the press the e-mails from
Maguire wherein he warns of a manipulative event.
Additionally
Maguire informed us that he has tape recordings of his telephone
communications with the CFTC, which we are taking the appropriate legal steps
to acquire.
* * *
From:
Andrew Maguire
Sent: Tuesday, January 26, 2010 12:51 PM
To: Ramirez, Eliud [CFTC]
Cc: Chilton, Bart [CFTC]
Subject: Silver today
Dear
Mr. Ramirez:
I
thought you might be interested in looking into the silver trading today. It
was a good example of how a single seller, when they hold such a concentrated
position in the very small silver market, can instigate a selloff at will.
These
events trade to a regular pattern and we see orchestrated selling occur 100%
of the time at options expiry, contract rollover, non-farm payrolls (no
matter if the news is bullish or bearish), and in a lesser way at the daily
silver fix. I have attached a small presentation to illustrate some of these
events. I have included gold, as the same traders to a lesser extent hold a
controlling position there too.
Please
ignore the last few slides as they were part of a training session I was
holding for new traders.
I
brought to your attention during our meeting how we traders look for the
"signals" they (JPMorgan) send just prior to a big move. I saw the
first signals early in Asia in thin volume. As traders we profited from this
information but that is not the point as I do not like to operate in a rigged
market and what is in reality a crime in progress.
As an
example, if you look at the trades just before the pit open today you will
see around 1,500 contracts sell all at once where the bids were tiny by
comparison in the fives and tens. This has the immediate effect of gaining
$2,500 per contract on the short positions against the long holders, who lost
that in moments and likely were stopped out. Perhaps look for yourselves into
who was behind the trades at that time and note that within that 10-minute
period 2,800 contracts hit all the bids to overcome them. This is hardly how
a normal trader gets the best price when selling a commodity. Note silver
instigated a rapid move lower in both precious metals.
This
kind of trading can occur only when a market is being controlled by a single
trading entity.
I
have a lot of captured data illustrating just about every price takedown
since JPMorgan took over the Bear Stearns short silver position.
I am
sure you are in a better position to look into the exact details.
It is
my wish just to bring more information to your attention to assist you in
putting a stop to this criminal activity.
Kind
regards,
Andrew Maguire
* * *
From:
Ramirez, Eliud [CFTC]
To: Andrew Maguire
Sent: Wednesday, January 27, 2010 4:04 PM
Subject: RE: Silver today
Mr.
Maguire,
Thank
you for this communication, and for taking the time to furnish the slides.
* * *
From:
Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]
Sent: Wednesday, February 03, 2010 3:18 PM
Subject: Re: Silver today
Dear
Mr. Ramirez,
Thanks
for your response.
Thought
it may be helpful to your investigation if I gave you the heads up for a
manipulative event signaled for Friday, 5th Feb. The non-farm payrolls number
will be announced at 8.30 ET. There will be one of two scenarios occurring,
and both will result in silver (and gold) being taken down with a wave of
short selling designed to take out obvious support levels and trip stops
below. While I will no doubt be able to profit from this upcoming trade, it
is an example of just how easy it is to manipulate a market if a concentrated
position is allowed by a very small group of traders.
I
sent you a slide of a couple of past examples of just how this will play out.
Scenario
1. The news is bad (employment is worse). This will have a bullish effect on
gold and silver as the U.S. dollar weakens and the precious metals draw bids,
spiking them higher. This will be sold into within a very short time (1-5
mins) with thousands of new short contracts being added, overcoming any new
bids and spiking the precious metals down hard, targeting key technical
support levels.
Scenario
2. The news is good (employment is better than expected). This will result in
a massive short position being instigated almost immediately with no move up.
This will not initially be liquidation of long positions but will result in
stops being triggered, again targeting key support levels.
Both
scenarios will spell an attempt by the two main short holders to illegally
drive the market down and reap very large profits. Locals such as myself will
be "invited" on board, which will further add downward pressure.
The
question I would expect you might ask is: Who is behind the sudden selling
and is it the entity/entities holding a concentrated position? How is it
possible for me to know what will occur days before it will happen?
Only
if a market is manipulated could this possibly occur.
I
would ask you watch the "market depth" live as this event occurs
and tag who instigates the move. This would surly help you to pose questions
to the parties involved.
This
kind of "not-for-profit selling" will end badly and risks the
integrity of the COMEX and OTC markets.
I am
aware that physical buyers in large size are awaiting this event to scoop up
as much "discounted" gold and silver as possible. These are
sophisticated entities, mainly foreign, who know how to play the short
sellers and turn this paper gold into real delivered physical.
Given
that the OTC market (where a lot of the selling occurs) runs on a fractional
reserve basis and is not backed up by 1-1 physical gold, this leveraged short
selling, where ownership of each ounce of gold has multi claims, poses a very
large risk.
I
leave this with you, but if you need anything from me that might help you in
your investigation I would be pleased to help.
Kind
regards,
Andrew T. Maguire
* * *
From:
Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 2:11 PM
Subject: Fw: Silver today
If
you get this in a timely manner, with silver at 15.330 post data, I would
suggest you look at who is adding short contracts in the silver contract
while gold still rises after NFP data. It is undoubtedly the concentrated
short who has "walked silver down" since Wednesday, putting large
blocks in the way of bids. This is clear manipulation as the long holders who
have been liquidated are matched by new short selling as open interest is
rising during the decline.
There
should be no reason for this to be occurring other than controlling silver's
rise. There is an intent to drive silver through the 15 level stops before
buying them back after flushing out the long holders.
Regards,
Andrew
* * *
From:
Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]; GGensler [CFTC]
Sent: Friday, February 05, 2010 3:37 PM
Subject: Fw: Silver today
A
final e-mail to confirm that the silver manipulation was a great success and
played out EXACTLY to plan as predicted yesterday. How would this be possible
if the silver market was not in the full control of the parties we discussed
in our phone interview? I have honored my commitment not to publicize our
discussions.
I
hope you took note of how and who added the short sales (I certainly have a
copy) and I am certain you will find it is the same concentrated shorts who
have been in full control since JPM took over the Bear Stearns position.
It is
common knowledge here in London among the metals traders that it is JPM's
intent to flush out and cover as many shorts as possible prior to any
discussion in March about position limits. I feel sorry for all those not in
this loop. A serious amount of money was made and lost today and in my
opinion as a result of the CFTC's allowing by your own definition an illegal
concentrated and manipulative position to continue.
Bart,
you made reference to it at the energy meeting. Even if the level is in
dispute, what is not disputed is that it exists. Surely some discussions
should have taken place between the parties by now. Obviously they feel they
can act with impunity.
If I
can compile the data, then the CFTC should be able to too.
I
would think this is an embarrassment to you as regulators.
Hoping
to get your acknowledgement.
Kind
regards,
Andrew T. Maguire
* * *
From:
Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 7:47 PM
Subject: Fw: Silver today
Just
logging off here in London. Final note.
Now
that gold is undergoing short covering, please look at market depth right now
in silver and evidence the large selling blocks in a thin market being put in
the way of silver regaining the technical 15 level, which would cause a short
covering rally and new longs being instigated. This is resulting in the
gold-silver ratio being stretched to ridiculous levels.
I
hope this day has given you an example of how silver is "managed"
and gives you something more to work with.
If
this was long manipulation in, say, the energy market, the shoe would be on
the other foot, I suspect.
Have
a good weekend.
Andrew
* * *
From:
Andrew Maguire
Sent: Tuesday, February 09, 2010 8:24 AM
To: Ramirez, Eliud [CFTC]
Cc: Gensler, Gary; Chilton, Bart [CFTC]
Subject: Fw: Silver today
Dear
Mr. Ramirez,
I
hadn't received any acknowledgement from you regarding the series of e-mails
sent by me last week warning you of the planned market manipulation that
would occur in silver and gold a full two days prior to the non-farm payrolls
data release.
My
objective was to give you something in advance to watch, log, and follow up
in your market manipulation investigation.
You
will note that the huge footprints left by the two concentrated large shorts
were obvious and easily identifiable. You have the data.
The
signals I identified ahead of the intended short selling event were clear.
The
"live" action I sent you 41 minutes after the trigger event
predicting the next imminent move also played out within minutes and exactly
as I outlined.
Surely
you must at least be somewhat mystified that a market move could be forecast
with such accuracy if it was free trading.
All
you have to do is identify the large seller and if it is the concentrated
short shown in the bank participation report, bring them to task for market
manipulation.
I
have honored my commitment to assist you and keep any information we discuss
private,however if you are going to ignore my information I will deem that
commitment to have expired.
All I
ask is that you acknowledge receipt of my information. The rest I leave in
your good hands.
Respectfully
yours,
Andrew
T. Maguire
* * *
From:
Ramirez, Eliud
To: Andrew Maguire
Sent: Tuesday, February 09, 2010 1:29 PM
Subject: RE: Silver today
Good
afternoon, Mr. Maguire,
I
have received and reviewed your email communications. Thank you so very much
for your observations.
* * *
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