SAC Capital and (and Steve Cohen, Too) Should Be Convicted of Murder

Former SAC Capital portfolio manager Mathew Martoma was convicted today for insider trading, and there is much discussion that SAC Capital founder Steve Cohen might be next, despite earlier reports that Cohen was to escape criminal charges even as the DOJ described Cohen as operating a hedge fund that was a criminal enterprise through and through.

That, in itself, is big news, and the government continues to advertise this case as the largest crackdown on Wall Street crime since the 1991 conviction of Michael Milken on charges of insider trading. It is also crack-down long in coming given that the SEC (way back in the 1980s) investigated (but did not charge) Steve Cohen for allegedly trading on inside information that Cohen had received from Milken’s shop at Drexel Burnham Lambert.

What the government and the media seem to be missing, however, is that SAC Capital has done far worse than trade on inside information, just as Milken did far worse than engage in the insider trading for which he was famously convicted. As has been documented at great length by Deep Capture, Milken and his associates operated a global market manipulation and money laundering network that busted out (i.e. deliberately destroyed) numerous public companies, including some of the nation’s most important savings and loan banks.

In more recent years, Milken and his associates, including Steve Cohen, have similarly busted out numerous public companies, with a component of those bust-outs being manipulative short selling. In light of revelations during the trial of Martoma that SAC Capital profited to the tune of more than $275 million from short-selling a pharmaceutical company, anyone interested in the real damage done by SAC Capital would do well to read my book, “The Dendreon Effect: How Felons, Con-men, and Wall Street Insiders Manipulate High-Tech Stocks.”

That, I confess, is shameless advertisement, but it is also a plea for justice because my book documents the fact that a network of short sellers, including the proprietors of SAC Capital and the famous Michael Milken, have (in recent years) not only traded on inside information about multiple pharmaceutical companies, but also nearly destroyed a company called Dendreon, which had a promising treatment for prostate cancer (a disease about which Milken’s “philanthropic” organization, the Prostate Cancer Foundation, purports to be concerned).

During the trial of Martoma, DOJ prosecutors confirmed that SAC Capital traded on inside information provided by a doctor at the University of Michigan, which was all well and good, but as I documented in my book, SAC Capital not only traded on inside information from another University of Michigan doctor, but also profited from short selling Dendreon’s stock after multiple doctors (some of whom had financial relationships with Milken) conspired to undermine Dendreon’s treatment by convincing the FDA (also corrupted by Milken and his associates) to delay approval of Dendreon’s treatment (which had already been proven effective).

Some journalists and their Wall Street sources have argued that insider trading is an essentially harmless offense and that SAC Capital deserves leniency, but their arguments obscure the fact that SAC Capital’s insider trading has involved the wholesale corruption of the FDA and some of the nation’s most prominent doctors, all of whom have (as my book documents in detail) shown themselves more than willing not only to provide inside information to Steve Cohen and his associates, including Milken, but also to undermine pharmaceutical companies with effective treatments while promoting other companies (i.e., companies that are financed by Milken and his associates) whose treatments were actually killing people.

  1. Mark, consider sending your book to Manhattan U.S. Attorney Preet Bharara if you haven’t already. He’s being called The “Sheriff of Wall Street” for a reason, his track record of 79-0 convictions is impressive.

  2. ‘Brazen Fraud’ Alleged at Dendreon Corp.


    Wednesday, May 22, 2013Last Update: 11:42 AM PT

    SEATTLE (CN) – Directors of Dendreon Corp. committed “brazen fraud” by dumping $85 million of their own shares at inflated prices while falsely claiming its expensive cancer drug Provenge was “completely sold out,” shareholders claim in court.
    Investors sued Dendreon and its top three officers, CEO Dr. Mitchell H. Gold, COO Hans E. Bishop, and CFO Gregory T. Schiffman, in Federal Court.
    “The revelation of the company’s fraud was devastating, erasing $3.5 billion from Dendreon’s market capitalization in a single day,” the complaint states. “Unlike defendants, who were able to sell substantial holdings of Dendreon stock before the fraud was revealed, the company’s unsuspecting shareholders suffered crippling losses. As put it, Gold had turned out like other Chief Executive Officers who had ‘hone[d] the fine craft of investor bamboozlement.'”
    Dendreon’s only FDA-approved product is Provenge, a prostate cancer treatment, the shareholders say in the complaint.
    “From April 29, 2010 through August 3, 2011 (the ‘Relevant Period’), defendants repeatedly touted the strong demand for Provenge, which the Company claimed was so strong that it was overwhelming the company’s ability to meet the demand,” according to the complaint. “At numerous investor conferences, on conference calls and in its filings with the U.S. Securities and Exchange Commission (‘SEC’), defendants emphasized the ‘very strong demand,’ the ‘incredibly high demand’ and the ‘no shortage of end-patient demand’ that existed for Provenge, which demand, according to the Company, purportedly was ‘exceeding our ability to supply the market’ and was resulting in ‘completely sold out capacity’ and ‘substantial waiting lists’ for treatment with Provenge. To underscore their statements, defendants followed up with bullish financial guidance to investors, projecting revenues of $350 to $400 million from Provenge in 2011.”
    But the shareholders say the individual defendants knew the rosy statements were “completely false” and were receiving weekly reports from sales managers warning of low sales.
    “As has now been revealed, these statements to investors were completely false. Furthermore, defendants knew at all times that these statements were false,” the complaint states. “As confirmed by former Dendreon employees, the company’s regional sales managers repeatedly warned defendants at weekly meetings that defendants’ statements had no basis in fact, and that the real demand being observed in the field was running at a much lower rate. Not only were these warnings communicated verbally at numerous meetings, the evidence backing these warnings was provided to defendants in the form of various internal reports that were disseminated to all members of senior management, including defendants Gold, Bishop and Schiffman.”
    But the defendants continued to issue optimistic statements about Provenge, while dumping their own shares at huge profits, the shareholders claim. Gold sold his shares for $35 million, according to the complaint.
    “All the while that they were disseminating these false statements to unsuspecting investors, defendants themselves were busily offloading their own holdings of Dendreon stock. During the relevant period, Dendreon’s officers and directors realized over $85 million in proceeds from insider stock sales. Defendant Gold, Dendreon’s chief executive officer, personally reaped over $35 million from the sale of Dendreon stock during the relevant period, including millions from sales made just weeks before the fraud was revealed to investors.”
    Shareholders claim the defendants were forced to “come clean” on Aug. 3, 2011, after close of trading, and admit the quarterly growth for Provenge would be “modest” at best. Dendreon also disclosed that demand for the drug had been hurt by physicians’ concerns about reimbursement and that the company was slashing its workforce by 25 percent, according to the complaint.
    Lead plaintiff Dr. Christoph Bolling and 23 other shareholders seek disgorgement and damages for fraud, negligent misrepresentation, and violations of securities and consumer laws.
    They are represented by Christina Haring-Larson with Slinde Nelson & Stanford

    1. eh anonymous (cough) who I think to be floyd, do tell who are the investors that sued? show us the suit for reference. i found the following interesting considering the most recent conviction 2/06/14 of and I quote from US Attorney press release about “MATHEW MARTOMA, a former portfolio manager of CR Intrinsic Investors, LLC, a division of S.A.C. Capital, was found guilty today in Manhattan federal court in connection with his participation in the most lucrative insider trading scheme ever charged, involving approximately $275 million in illegal profits and avoided losses. MARTOMA was convicted after a four-week jury trial presided over by U.S. District Judge Paul G. Gardephe.”

      note Sac Capital related CR Intrinsic Investments holdings etc below:

      Update on SAC Capital’s Dendreon, Vermillion Holdings
      Tue, 01/19/2010 – 03:17 EDT – Seeking Alpha DNDNMarket FollyVRMLQ.PKMarket Folly submits:We recently saw two SEC filings of note out of Steven Cohen’s hedge fund firm SAC Capital. Firstly, in a 13G filed with the SEC, SAC Capital has disclosed a 5.5% ownership stake in Dendreon (DNDN). The filing was made due to activity on January 7th, 2010 and it now owns 7,282,030 shares. The breakdown of its share ownership is a bit complex and you have to dig into the footnotes to gain clarification. These totals include 3,900 shares subject to call options held by SAC Select Fund and 375,000 Shares subject to call options held by SAC Capital Associates, and 425,000 shares subject to call options held by CR Intrinsic Investments. Secondly, SAC Capital filed another 13G on shares of Vermillion (VRMLQ.PK). The filing was made due to activity on January 7th, 2010 and SAC now shows a 9.9% ownership stake with 1,015,000 shares.Complete Story »

  3. Watching steve cohen do a perp walk would be sweet after all these years.
    First we took down rocker, now cohen is floundering, soros may be too far to reach, but the easter bunny has to be laughing.

  4. Yes, I just confirmed that I my attempted posts quotating a S Expert about Manipulation of G & S are being BLOCKED now,

    What has happened to Deep

    Is it now being controlled by Wall Streeters?

  5. SAC Capital May Have Lost $196 Million on Paper in Dendreon Stock Plunge

    By Saijel Kishan and Katherine Burton

    – Aug 4, 2011 SAC Capital Advisors LP, the $14 billion hedge fund run by billionaire Steven A. Cohen, may have a one-day paper loss of about $196 million from its stake in Dendreon Corp. (DNDN), the drugmaker that plunged the most ever after it withdrew its 2011 revenue estimate.

    SAC Capital owned 8.2 million shares of Seattle-based Dendreon as of March 31, making it the biggest shareholder, according to a regulatory filing. Dendreon fell 67 percent, or $23.87, to $11.97 at 3:15 p.m. New York time in Nasdaq Stock Market trading, the largest decline since its initial public offering in June 2000.

    Chief Executive Officer Mitchell Gold said in a statement yesterday that the company was educating doctors about prostate- cancer drug Provenge and a decision last month by the U.S. Medicare and Medicaid program to pay for the $93,000 treatment. Billionaire George Soros, who last week told clients he will be return their money, also had a stake in Dendreon.

    SAC Capital’s CR Intrinsic unit held 625,000 shares of Dendreon as of the end of the first quarter, according to a filing. Jonathan Gasthalter, a spokesman for the Stamford, Connecticut-based hedge fund, declined to comment.

    Soros Fund Management LLC in New York held 4.7 million shares as of March 31, according to filings. Citadel LLC, Balyasny Asset Management LP, both in Chicago, and Millennium Management LLC, Healthcor Management LP and Visium Asset Management in New York were among the hedge funds that also owned Dendreon stock, according to filings.

    Revenue Forecast

    Dendreon previously estimated annual revenue of $350 million to $400 million. The company believes the market size for Provenge is substantial, though it expects only modest increases in sales each quarter for the remainder of the year, Gold said in the statement.

    The main stumbling block for Provenge is the lack of knowledge about insurance coverage, he said. The Centers for Medicare & Medicaid Services issued a final ruling in June saying the $93,000 treatment is “reasonable and necessary” for men with advanced prostate tumors resistant to hormone therapy who have minimal or no symptoms.

    The agency’s decision “will have a significant impact on increased physician adoption,” Gold said in the statement. “However, we believe this will take time, and for the remainder of 2011, the launch trajectory will reflect a more gradual adoption of Provenge as physicians gain confidence in this positive reimbursement landscape.”

    $48 Million Sales

    Provenge, the first approved therapy that trains the body’s immune system to attack cancer cells as if they were a virus, generated $48 million last year. Analysts surveyed by Bloomberg expected revenue to reach $370 million this year if the company boosts its capacity by expanding a New Jersey plant and adding new manufacturing sites in Los Angeles and Atlanta.

    Instead, the drugmaker will reduce its expenses and eliminate positions to meet the lower demand for the product, Gold said yesterday. The company didn’t specify how many jobs would be lost.

    To contact the reporters on this story: Saijel Kishan in New York at [email protected]; Katherine Burton in New York at [email protected]

    To contact the editor responsible for this story: Christian Baumgaertel at [email protected]

  6. Mark

    Having trouble finding your book. Even tried Overstock. Do you have any suggestions on where I can obtain one.


  7. from The US Attorneys Office Southern Dist of NY
    SAC Capital Portfolio Manager Mathew Martoma Found Guilty In Manhattan Federal Court Of Insider Trading Charges
    FOR IMMEDIATE RELEASEThursday, February 6, 2014 Most Lucrative Insider Trading Scheme Ever Charged Earned S.A.C. Capital $275 Million In Illegal Profits And Avoided Losses
    Preet Bharara, the United States Attorney for the Southern District of New York, announced that MATHEW MARTOMA, a former portfolio manager of CR Intrinsic Investors, LLC, a division of S.A.C. Capital, was found guilty today in Manhattan federal court in connection with his participation in the most lucrative insider trading scheme ever charged, involving approximately $275 million in illegal profits and avoided losses. MARTOMA was convicted after a four-week jury trial presided over by U.S. District Judge Paul G. Gardephe.

    Manhattan U.S. Attorney Preet Bharara said: “As the jury unanimously found, Mathew Martoma cultivated and purchased the confidence of doctors with secret knowledge of an experimental Alzheimer’s drug, and used it to engage in illegal insider trading. Martoma bought the answer sheet before the exam – more than once – netting a quarter billion dollars in profits and losses avoided for SAC, as well as a $9 million bonus for him. In the short run, cheating may have been profitable for Martoma, but in the end, it made him a convicted felon, and likely will result in the forfeiture of his illegal windfall and the loss of his liberty. Mathew Martoma becomes the 79th person convicted of insider trading after trial or by guilty plea in this District in the last four years.”

    According to the allegations in the Superseding Indictment filed in Manhattan federal court, other court documents, and the evidence presented at trial:

    During the period of the insider trading scheme, MARTOMA was an S.A.C. Capital portfolio manager responsible for investment decisions in public companies in the health care sector, including pharmaceutical companies Elan and Wyeth, that were involved in the development of experimental drugs to combat Alzheimer’s Disease. At the time, scientists and investors alike were awaiting the results of a clinical trial being conducted by Elan and Wyeth for a drug called bapineuzumab, which offered a novel but untested approach to the treatment of Alzheimer’s Disease (the “Drug Trial”).

    In order to obtain material nonpublic information (the “Inside Information”) about the Drug Trial, MARTOMA, shortly after starting his employment at S.A.C. Capital in the summer of 2006, began using expert networking firms to try to speak to doctors involved in the Drug Trial with access to confidential information. Through these efforts, MARTOMA arranged dozens of paid consultations with one of the Drug Trial’s principal investigators, Dr. Joel Ross, and the chairman of the Drug Trial’s Safety Monitoring Committee (“SMC”), Dr. Sidney Gilman. Through an exploitation of MARTOMA’s personal and financial relationships with these doctors, MARTOMA was able to obtain Inside Information about the Drug Trial.

    The Inside Information that MARTOMA initially received from Dr. Ross included anecdotal reports concerning patients under Dr. Ross’s care. The Inside Information MARTOMA initially received from Dr. Gilman included generally positive safety data about which Dr. Gilman was aware through his chairmanship of the SMC. In fact, MARTOMA arranged a paid consultation shortly after each and every SMC meeting, in part to ensure that he would be among the first to learn if any substantial safety issues were emerging from the Drug Trial that could lead to the cancellation of the Drug Trial and decreases in the price of Elan and Wyeth stock. Based in part on the positive safety information, MARTOMA purchased and held shares of Elan and Wyeth, and further recommended that the owner of S.A.C. Capital (the “S.A.C. Capital Owner”) purchase and hold Elan and Wyeth securities, which the S.A.C Capital Owner did. By the spring of 2008, S.A.C. Capital held approximately $700 million worth of Elan and Wyeth equity securities.

    Elan and Wyeth planned to release the full results of the Drug Trial to the investing public at the International Conference on Alzheimer Disease (the “ICAD Presentation”) on July 29, 2008. Dr. Gilman was selected to present the results on behalf companies and was “unblinded” to the full safety and efficacy results of the drug trial on July 15, 2008. Until that time, Dr. Gilman had only been privy to the safety results of the Drug Trial. On July 17, 2008, Dr. Gilman received a draft PowerPoint presentation that had been created for the ICAD meeting and that was marked “Confidential, Do Not Distribute.” The draft PowerPoint presentation showed that the Drug Trial results were negative, particularly in comparison with market expectations. The results raised serious questions about how well the drug worked and, in fact, whether it worked at all.

    Later on July 17, 2008, MARTOMA called Dr. Gilman from his home and spoke to Dr. Gilman in detail about the draft PowerPoint presentation during a phone call that lasted one hour and forty-five minutes. Then, on Saturday, July 19, 20008, MARTOMA flew roundtrip from New York City to Detroit, Michigan, to meet Dr. Gilman in his University of Michigan office and review the draft PowerPoint presentation further.

    The next day, Sunday, July 20, 2008, MARTOMA sent the owner of S.A.C. Capital (the “S.A.C. Capital Owner”) an email in which he wrote that “…It’s important [that we speak,]” which they did, for approximately 20 minutes. The S.A.C. Capital Owner then directed S.A.C Capital to sell Elan and Wyeth securities prior to the ICAD Presentation. Over the next seven days, S.A.C. Capital liquidated its entire equity position in Elan and almost all of its equity position in Wyeth – a total of 17.7 million shares worth approximately $700 million. S.A.C. Capital also shorted Elan and Wyeth by approximately 7.75 million shares. This trading represented over 20% of the reported U.S. trading volume in Elan and 11% of the volume in Wyeth.

    MARTOMA also received information about the ICAD presentation from Dr. Joel Ross. In particular, on the evening of July 28, 2008, after Dr. Ross had been un-blinded to the Drug Trial results at a dinner for Principal Investigators, Dr. Ross met with MARTOMA in a hotel lobby to discuss the negative results. To Dr. Ross’s surprise, MARTOMA already seemed to have seen the Drug Trial results.

    The day after the ICAD presentation, Elan stock closed approximately 42% lower, and Wyeth shares fell approximately 11%. Through this trading activity S.A.C. Capital earned profits and avoided losses of approximately $275 million.

    * * *

    MARTOMA, 39, was convicted of one count of conspiracy to commit securities fraud and two counts of securities fraud. He faces a maximum penalty of five years in prison for the conspiracy charge and 20 years in prison on each of the two securities fraud charges. With respect to the conspiracy charges, he faces a maximum fine of $250,000, or twice the gross gain or loss derived from the crimes, and for the securities fraud charges, he faces a maximum fine of $5 million, or twice the gross gain or loss derived from the crime on each charge.

    Mr. Bharara praised the efforts of the FBI and also thanked the SEC for its assistance in the investigation. He added that the investigation is continuing.

    This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit

    This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Arlo Devlin-Brown, Eugene Ingoglia, Megan Gaffney, and Andrea Griswold are in charge of the prosecution.


    Read the indictment here:
    U.S. v. Mathew Martoma S1 Indictment.pdf,%20Mathew%20S1%20Indictmentpdf.pdf

  8. It also seems clear to me that the reason JPMorgan is not abandoning gold and silver is because the bank holds such a dominant and controlling market share in every aspect of gold and silver that it can’t depart without severely disrupting these markets.

    JPMorgan has grown to be such an integral factor in gold and silver pricing that its departure would necessarily create a price upheaval that will be welcomed by gold and silver investors.

    In fact, I believe JPMorgan (and the Feds) recognize this and that is why JPM has amassed such a large long position in COMEX gold and in physical silver; so that the inevitable price violence works for one last time in the bank’s favor.

    When that day of upheaval will come is impossible to know, although it must be closer than ever before. In the interim, we must be prepared for whatever the COMEX and JPMorgan throw at gold and silver investors.

    In that sense, today’s [Wednesday] early price rig to the upside must be treated as both a fake-out designed to end at some point in induced selling; as well as a first step to the coming price violence to the upside.

    – Silver analyst Ted Butler: 05 February 2014

  9. JPMorgan’s short market corners of 20% in COMEX gold and 35% in COMEX silver of a year ago—and the bank’s 21% long market corner in COMEX gold currently—meet or exceed the market shares held in the previous manipulations.

    On that basis alone, the CFTC should be prosecuting JPMorgan today.

    The Sumitomo copper trader who manipulated the market was known as “Mr. 5%” for his share of the market. Shouldn’t JPMorgan be referred to as Mr. 20% or Mr. 35%?

    – Silver analyst Ted Butler: 08 February 2014


  10. Hi Mark,

    When do you go after John McCain

    John McCain: Are His
    Backers Out of Prison?

    by Jeffrey Steinberg, Richard Freeman, and Anton Chaitkin

    On Oct. 15, 1982, President Ronald Reagan signed into law the Depository Institutions Deregulation and Monetary Control Act, otherwise known as “Garn-St Germain,” after the principal Congressional sponsors. As a direct result of this disastrous deregulation legislation, within the span of a decade, a small tightly organized network of financial pirates—many with close ties to the Meyer Lansky National Crime Syndicate—would pull off the biggest heist in American history. By the early 1990s, the U.S. savings and loan industry (S&Ls)—once the backbone of the home mortgage industry and the preferred safe depository of household savings—was wiped out. Many of America’s oldest industrial corporations were looted and left for dead, through hostile takeovers, engineered by junk bond financing. To untangle the S&L carnage, the Federal government created the Reconstruction Trust Corporation (RTC) and eventually shelled out $200-250 billion in taxpayers’ money, to avert an even deeper collapse of the U.S. real estate and banking sectors.

    A handful of the crooks—including Ivan Boesky, Michael Milken, and Charles Keating—were imprisoned for their roles in the looting scheme. Briefly, a few members of Congress were spotlighted and slapped on the wrists for their own profiteering and coverup efforts. But the full extent of this criminal looting of America was barely known, and today is largely forgotten. The biggest political beneficiary of the public’s amnesia is John McCain. With the exception of Sen. Joseph Lieberman’s (D-Conn.) own ties to hedge fund bandit Michael Steinhardt, no American politician is as beholden to organized crime as the senior Senator from Arizona and would-be 2004 “Bull Moose” spoiler candidate for the Presidency.

  11. Starting in January 1987, Keating looked for help from what became known as the Keating Five: U.S. Senators Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), and Donald W. Riegle (D-MI).[71] Keating had, or would soon make, legal political contributions of about $1.3 million to the senators, and he called on them to help him resist the regulators.[72] Keating had become a personal friend of McCain following their initial contacts in 1981,[73] and McCain was the only one of the five with close social and personal ties to Keating.[74][75] McCain and his family had made several trips at Keating’s expense, sometimes aboard American Continental’s jet, for vacations at Keating’s opulent Bahamas retreat at Cat Cay.[68]

    Keating asked that Lincoln be given a lenient judgment by the FHLBB, so it could limit its high risk investments and get into the relatively safe home mortgage business, allowing the business to survive.[68] A letter from audit firm Arthur Young & Co. bolstered Keating’s case that the government investigation was taking a long time.[73] McCain initially refused to meet with Keating over the FHLBB matter and Keating called McCain a “wimp” behind his back.[73] The two had a heated, contentious meeting in which McCain said he had not spent years in North Vietnamese prisoner-of-war camps to have his courage or integrity questioned; the friendship ended and they would not speak again.[73] In April 1987, the group of senators met twice with FHLBB members who were investigating American Continental Corporation and Lincoln, in an attempt to end the investigation. Meanwhile Keating filed a lawsuit against the FHLBB, saying it had leaked confidential information about Lincoln.[66] The outgoing head of the FHLBB deferred judgment on the matter, and the new head was more sympathetic to Keating;[68][70] in May 1988, the FHLBB agreed to an unprecedented memorandum of understanding that gave Lincoln a clean slate and forgiveness for any violations up to that point.[76] (In 1991, the senators would be rebuked to various degrees by the Senate Ethics Committee, with Cranston receiving the harshest verdict and Glenn and McCain the least. McCain later testified against Keating in a civil lawsuit brought by Lincoln bondholders, while the other four refused to testify.)[77][78]

  12. Gold and Silver Manipulation:

    I understand some wanting to make excuses for JPMorgan’s undeniably large market shares in gold and silver.

    There is an instructive message here as well – since JPM’s market corners can’t be denied, all that’s left is trying to explain it away any way possible. The excuses confirm that the market shares held by JPM exist and need explaining.

    Oh, and one last flimsy excuse is needed to explain, if these outsized market corners are so normal, why is there only one bank atop the gold and silver market heap?

    If this market making is such a legitimate business – why aren’t other banks offering competition? I have a better question – why is JPMorgan so entrenched in gold and silver trading, when they are withdrawing from every other commodities business?

    (I say because they can’t exit quietly as they are the market).

    – Silver analyst Ted Butler: 12 February 2014


  13. JPMorgan demanded (and received) Permanent immunity from future Gold and Silver allegations…

    Theodore Butler | February 17, 2014

    … Any regulator worthy of the name should have known that a lopsided, large trader mismatch was dangerous on the short side. Having misjudged just how dangerous the situation was, the CFTC and the CME Group put in motion a scheme to save the shorts and punish gold and silver investors. By arranging, with the Federal Reserve Chairman and Treasury Secretary, to have JPMorgan take over Bear Stearns’ silver and gold short positions, the US Government embarked (or continued) on a journey of allowing price manipulation, in stark violation of commodity law….

    The interference of the U.S. Government in the Bear Stearns affair explains what was previously inexplicable: why the CFTC couldn’t find anything after investigating a silver manipulation for five years, and why the CFTC and CME were deathly quiet in reaction to the giant price smashes in gold and silver, particularly the two 30% price smashes within days in silver in May and September of 2011.

    What baffles me today is that no well-known journalist from outside the gold and silver world has yet picked up on what is an easy-to-document story of epic historical proportions. It’s the story of why Bear Stearns went under, and how the gold and silver price manipulation continued since the day JPMorgan took over Bear. I think the story has Pulitzer Prize written all over it.


  14. Gold and Silver Manipulation:

    After buying back short silver contracts in the prior two reporting weeks (as well as adding long gold contracts), JPMorgan returned to the sell side in silver with a vengeance, accounting for the entire big 4 short increase or more than 43% of the commercial silver selling this [past] week.

    While there’s no doubt in my mind that the raptors behave conclusively with JPMorgan in playing the technical funds, it must be noted that the raptors were selling existing long positions, not adding to shorts. In the reporting week, JPMorgan increased its short COMEX silver position to 17,500 contracts, or to a 15% net market share (minus spread positions).

    From what I can tell, JPMorgan was the only commercial increasing short positions in the reporting week, something that has recurred on previous silver price rallies.

    Please think about that for a moment. JPMorgan was the sole short seller in COMEX silver and the largest seller in COMEX gold, accounting for 43% and 52% of all the commercial selling in each market this week.

    How could such large shares of net weekly trading not be manipulative to the price of silver and gold?

    And why is the nation’s largest bank also allowed to be its largest precious metals speculator?

    – Silver analyst Ted Butler: 22 February 2014

  15. Jury Convicts Former CEO of Publicly Traded Company of Securities and Mail Fraud

    February 26, 2014

    Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that a federal jury convicted Richard Altomare, 65, of Palm Beach County, on all four counts of the indictment, including one count of mail fraud and three counts of securities fraud. Altomare was the former CEO of Universal Express, Inc.

    According to the indictment and evidence presented during the trial, Altomare carried out a scheme to artificially inflate the share price and trading volume of stock for a publicly traded company then known as Sunset Brands, Inc. (SSBN). Altomare agreed to pay a former business associate to purchase shares of SSBN stock to give the investing public the false impression that SSBN’s stock was rising and that there was a public market for SSBN stock. Unbeknownst to Altomare, his former associate was an informant for the FBI. During recorded conversations and meetings, Altomare promised to compensate the informant with SSBN stock to induce his cooperation in the scheme. Altomare agreed to bolster the fraudulent buying program by agreeing to cause SSBN to issue one or more press releases announcing positive news about the company, which would be timed to follow and coincide with the illegally induced purchasing by the informant. The purpose of the press releases was to give the investing public the false impression that the purchase of SSBN stock was induced by positive news about the company and to conceal the market manipulation scheme from regulatory authorities.

    Sentencing has been scheduled for May 6, 2014 at 1:15 p.m. before U.S. District Judge William Dimitrouleas in Ft. Lauderdale. At sentencing, the defendant faces up to twenty years in prison for each count of mail fraud and securities fraud.

    Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorneys Alejandro O. Soto and Kevin Larsen.

  16. Gold and Silver Manipulation:

    Everywhere I look, I find continuous evidence that JPMorgan dominates and controls the silver (and gold) market. The proprietor of the very informative silver website, Joshua Gibbons, sent me some information I wasn’t quite aware of, including a separate analysis that JPMorgan makes up 45% of dealings on the LBMA.

    This dovetails perfectly with JPM’s OTC share of 60% for gold and other precious metals derivatives among U.S. banks (in the OCC Treasury Department report).

    Remember, in last week’s COT report, JPMorgan accounted for 43% of all commercial silver selling on the COMEX-

    –and 100% of all new short sales-

    –plus 52% of all COMEX commercial gold selling.

    How could such market shares not equate to control and de facto price manipulation?

    – Silver analyst Ted Butler: 26 February 2014

  17. Gold and Silver Manipulation:

    After two days of delivery for the March silver contract, JPMorgan took 997 contracts, or two-thirds of the 1,494 issued.

    Since deliveries are generally assigned by the amount of open interest held by respective clearing members, unless many new contracts are established in the March COMEX silver futures contract before month end, it can be guessed that JPMorgan will likely take 600 or so of the roughly 1,000 contracts still remaining open (after adjusting for Monday’s deliveries).

    All this would tend to confirm that JPMorgan is still interested in acquiring physical silver despite its recent increase in silver futures shorting on the COMEX.

    It may not be far off to suggest that JPMorgan might be shorting silver futures contracts in order to buy physical at depressed prices,

    even though that’s as illegal as it gets.

    – Silver analyst Ted Butler: 01 March 2014

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