Thursday, October 28, 2010

Let The Games Begin: Et. al. v. JP Morgan and HSBC

By now everyone with a stake in this issue is fully aware of the lawsuits filed yesterday by two separate plaintiffs against JP Morgan and HSBC.  It's not my intent to offer a view on how this suit will unfold and we certainly have no idea what the ulitmate intent is of the plaintiffs and its representing lawfirm, Lovell, Stewart, Halebian, Jacobson (i.e. are they going after an easy, massive financial settlement and not true justice?).

It's not my intent to analyze probabilities and offer speculation on whether or not the chain of judges that will ultimately review this case are not corrupted. To be sure, there are grey areas of the law to be debated in court in which any judge will have to exercise "judgement" as to whether or not this case has merit.

There's the very real possibility that the representing law firm will manage to extract a big settlement out of JPM in which this case will be put to rest and JPM is not required to admit to any wrongdoing. In Blanchard v American Barrick, JP Morgan et al, JPM was eventually dropped from the suit and Blanchard extracted a big settlement from Barrick AND ABX did not have to admit to any wrongdoing.

As for the "grey" area that can be exploited by a corrupted judge, I offer up this decision in the Reg Howe v BIS suit, of which every longstanding GATA supporter is knowledgeable and in which Reg Howe accused the BIS, Fed, Treasury, Bk of England and some bullion banks of manipulating the market. Here is the judge's decision to toss out the case:

...not because the Defendants didn't manipulate the price of gold. Rather, the case was dismissed for a reason that I consider to be a technical matter. The Judge said that Reg did not have standing.

To explain this point, the Judge states: "...there are many participants in the gold and gold derivatives markets who could allege a more direct injury than does the plaintiff. For example, there are many gold mining companies and private investors in gold (not to mention those central banks with gold reserves) that the plaintiff does not allege to be involved in the conspiracy. All of these persons or entities would be more directly injured than the plaintiff by a scheme of the kind he alleges." LINK
But let's fantasize for a second about a real possibility. If the Plaintiff is allowed enough leeway for discovery AND the plaintiff AND its law firm decide to do the right thing and take this case to its limits: this suit could ultimately reveal the extent to which JPM/HSBC actually have real physical silver/gold with which to back up and deliver if they were ever called on by the big long positions in the futures market. It could further lead to real discovery about the true extent of the paper short in gold/silver that we know exists in NY and London vs. the available of deliverable, unemcumbered bullion. I think we all know the answer to that issue, but knowing the truth and getting the legal door opened to prove it in a corrupted court system are two entirely different matters.

Ultimately this could be the kind of lawsuit that opens the necessary crack in the door that needs to be opened in order to completely rip apart our system in the way that GATA has maintained since its inception. There's a very real possibility that this lawsuit could open the door for what needs to be done to ultimately save our country.

Let's hope this suit is ultimately about Truth, Liberty and the pursuit of Justice and not just about a bulldog NY law firm with political connections taking on a lay-up lawsuit in order to extract a big financial settlement.

Va bene - Che il gioco inizi


  1. A better headline for this post would have read: Let The *End* Games Begin.

  2. Silver Dragon is looking like a real wooofer...
    Is this a MASSIVE buying op? Or the begininning of the end?

  3. I added yesterday at .23.

    Do your own due dili and you tell me. Please get Marc Hazout's phone number off of the website and call him. He will return your call and answer your questions.

  4. Dear Dave,

    End Game OR A New Beginning, whatever it is I feel sad. Such a beautiful and bountiful country going this way. I came to US as a expert on trading computers at NYSE and have earned/saved substantially by working here.

    On the other hand I should be happy that this market manipulation in PM's is going to come to an end. End to this market manipulation is going to have enormous effect in this part of the world.

    Hats off to people like and many others who are being vocal and educating others without a penny.

    From India

  5. Thanks for the comments India! It's your native country who gets "it" and is driving gold right now. Well, China too. And Russia. lol

    It's a beautiful country being looted and destroyed by those in a position to do so. We only have ourselves to blame.

  6. So what is more likely in Amerika, Truth, Liberty and the pursuit of Justice or a bulldog NY law firm with political connections taking on a lay-up lawsuit in order to extract a big financial settlement?

  7. Maybe the FED will send out a fill in the blank survey to the big banks and ask:
    -Should we allow this lawsuit to go on?
    -yes -no
    Return promptly

  8. LOL gyc - good one

    Anonymous, I don't know. The cynic in me says "the latter." But according Midas/Bill Murphy, as per tonight's Midas commentary, there is potentially a much wider "net" being cast behind the scenes that could yield the former.

    I'm in "wait and see" mode. Either way the metals are going a lot higher.

  9. re: SDRG. before anyone whines or screams at me, i'm guessing the company is doing some kind of privately placed finanicng priced at .18 or .20 in order to raise the funding needed to list on the TSX and to get their Mexico operation up and running - i.e. milling the silver ore stockpiled. everything for both to happen is in place except funding.

    we are adding to our position here. due your own due diligence. these small caps stocks can be volatile and risky. i trust my analysis on this one.

  10. Re: SDRG

    Found this post on investorhub:

    Late day news out... and if anybody is wondering why the did not put this out during market hours, heres the reason IMO...

    The Company has also been made aware of land title issues regarding the Cerros las Minitas project and related concessions. The Company's management and counsel are investigating and will be taking the appropriate actions. The Company will provide further updates in due course.

    Companies will usually make a statement if they feel its not serious, which they did not... Lots of time and money invested in this property, hopefully it works out.

  11. yes and i'm waiting to get more information about that issue. my guess is the ceo needs to have his attorneys look into it since it came from left field.

    i don't believe this selling is related to that. the value of mexico isn't even priced into the stock. no cares about mexico - they only care about china.

    if you notice, they specifically reference the intent to submit a tsx listing application this quarter. i know they need money to pay for that - it's not cheap.

    i'm betting they are doing some kind of private placement financing with warrants and the slime balls buying it are selling stock against the unit in order to get free warrants.

    they also reference more drilling results to be coming soon from Dadi and Laopandao. Both should be quite prolific. They also reference the likelihood of a Laopandao resource report.

    in my view, this is a buying opportunity.


  13. "Va bene - lasciate dell'inizio dei giochi!"
    Dave I loved your article and I love the Broncos, but what you wanted to say was:
    Che i giochi abbiano inizio!

    If you were an european investor would you join the class-action lawsuit proposed by Gata with Labaton Sucharow LLP?

  14. I knew SDRG Silver Dragon was looking like a real wooofer pig! 0.17???? One day plunger?? What's that CEO NOT telling us?

    Is this another MASSIVE buying op? Or the begininning/middle of the end?

  15. Thanks anonymous. I'm taking beginning Italian right now. Have only had 3 classes. My girlfriend has a 2 yr head start on me and my goal is to catch up with her quickly (hopefully -she's from Germany and spent summers in Italy growing up).

    RE: your question. I would contact Labaton and ask what would be involved. If/when they solicit co-plaintiffs, I would definitely jump on it. We will probably do that with our fund and I probably will as an indivual. I got wailed on trading silver when JPM/Henry Paulson took silver down in the summer of 2008.

  16. I believe, if there's any attorneys on here please elaborate, that we have to wait until this legal complaint gets "certified" as a class-action. That involves the Plaintiff filing a motion with that request. It also means we get discovery right away.

  17. re: sdrg. I dunno man. What i think happened was it was "plunged" once it failed to clear its 200 dma. the plunger wanted to take it below the 50 dma and shake out pussies. i know for a fact the one colleague of mine had a personal bid for 250k shares at .18. Shares traded below his bid in small quantity but they did not fill him on any. Because a limit order does not have to be filled unless the the other side buyer/seller has size to match the order, it tells me this guy wanted to try and paint the tape lower.

    It also "coincidentally" bounced right at the big support level at .17.

    My buddy bought shares betweene .19 and .21. I bought shares at .21 a little bit ago. I really believe this one should be back in the mid-20's next week at least. Especially with silver going nuts.

    Hope that helps.