FT - CFTC puts spotlight on silver trades

CFTC puts spotlight on silver trades
By Gregory Meyer in New York and Jack Farchy in London
Published: October 26 2010 18:41 | Last updated: October 26 2010 18:41

A senior US commodities regulator has alleged fraud in silver trading more than two years after investigators began a probe into the market.

Bart Chilton, commissioner at the Commodity Futures Trading Commission, said “members of the public” and “publicly available documents” convinced him the silver markets are tainted by violations of federal commodities law.

“I do believe that there have been repeated attempts to influence prices in the silver markets,” Mr Chilton said on Tuesday at a meeting in Washington. “There have been fraudulent efforts to persuade and what I consider deviously control that price.” The CFTC, the US watchdog, in September 2008 disclosed that it was investigating misconduct in the silver market. The announcement followed complaints by small investors that silver prices were artificially suppressed.

Mr Chilton, a Democrat appointed in 2007, has emerged as an outspoken advocate of limiting traders’ commodity holdings. In his remarks he declined to identify traders engaged in silver shenanigans and did not cite evidence gathered by CFTC investigators. Through an aide, he declined an interview request.

Silver critics suspect that a handful of large traders control a disproportionate “short”, or selling, position in futures....


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