CFTC Concludes No “Viable Basis” for Silver Manipulation Case

The Wall Street Journal reported that the Commodity Futures Trading Commission (CFTC) has closed a “high-profile investigation into alleged manipulation of the silver market” five years after the case was opened. No firms or individuals were charged and the regulator concluded that there is no “viable basis” for a case.

As quoted in the market news:

The silver probe began in 2008 after market participants complained of pricing discrepancies between physical silver and the $19 billion market for financial futures, asserting large banks were suppressing market prices to profit from their short positions.

Officials say investigators spent the equivalent of more than three working years on the case, reviewing position and trading data in physical, swaps, options and futures markets, in addition to interviewing witnesses.

In order to win a manipulation case, the CFTC must prove a trader not only has the intention to manipulate the prices, but also show an actual trade that resulted in an uneconomic price. The agency found some suspicious trades, but it didn’t find enough evidence to meet the criteria to bring a case, according to a person familiar with the probe.

Click here to read the full report from The Wall Street Journal.