JPMorgan Wins Court Dismissal in Silver Futures Rigging Lawsuits

On Wednesday, JPMorgan Chase (NYSE:JPM) won three dismissals of private antitrust lawsuits accusing them in 2010 and 2011 of placing artificial bids onto the trading floor, harangued employees at metals market COMEX to obtain prices it wanted, and made misrepresentations to a committee that set settlement prices.
As quoted in the Reuters news article.

This allegedly squeezed traders like Shak, who is also known for playing high-stakes poker, forcing them to post more capital to support their positions in silver futures spreads, and ultimately liquidate them at heavy losses.
U.S. District Judge Paul Engelmayer in Manhattan, however, said the plaintiffs, who also included traders Mark Grumet and Thomas Wacker, did not show that JPMorgan made “uneconomic” bids, or intended to rig the market at counterparties’ expense.
He also questioned the plaintiffs’ use of Silver Indicative Forward Mid Rates (“SIFO”) as a benchmark for determining proper levels for the spreads in their lawsuits.
“Given the (lawsuits’) failure both to explain why SIFO should track silver futures spreads, and to concretely plead that it did so consistently, a mere general correlation between these two is not sufficient to make SIFO a reliable benchmark such that deviations from it support a claim of irrational pricing animated by anticompetitive aims,” Engelmayer wrote.
David Kovel, a lawyer for the plaintiffs, declined to comment. Brian Marchiony, a JPMorgan spokesman, said the bank is pleased with the decision.

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