Banking giants HSBC and JP Morgan have been accused of "intentionally and unlawfully" suppressing the price of silver futures traded on the Comex exchange in New York after an ex-employee of Goldman Sachs in London blew the whistle on the scheme.
In a lawsuit filed in New York last week, trader Eric Nalven has launched a class action suit against the two banks, claiming they "artificially depressed the price of silver dramatically downward" in a scheme that netted the banks "substantial illegal profits".
This follows two suits filed at the end of October against both banking groups, one of which claimed the "defendants reaped hundreds of millions of dollars, if not billions of dollars in profits" from the conspiracy.
The ex-Goldman Sachs employee, a veteran of 40 years, reported the two banks activities to the US derivatives regulator, the Commodity Futures Trading Commission (CFTC), which has been conducting an investigation into the manipulation of the silver market.
The whistleblower claims he was told about the conspiracy and scheme by traders.
A spokesman for JP Morgan declined to comment.
A spokesman for HSBC said: "We aren't commenting on this case other than to say we will defend ourselves through proper legal channels."
The conspiracy and scheme was enormously successful, netting the defendants substantial illegal profits. The conspiracy and scheme has been corroborate by a 40-year industry veteran and former employee of Goldman Sachs (the "Informant") who was told by representatives of the defendants about the conspiracy and scheme. The Informant has stated that he had been told first hand by traders at JPMorgan that JPMorgan manipulates the silver market. The JPMorgan traders would brag to the Informant about how much money they were making as a result of such manipulation.
Informant Lawsuit -