Bill
Thought you fellows might be interested in a phone call I received this afternoon. I control accounts worth north of $10 million and the call was from my private client Fidelity Investment Representative. The accounts are heavily weighted to the natural resource sectors, primarily gold and silver shares. He asked if I might want to participate in a “capital shares” or some such program in which I would lend my shares to Fidelity for a fee for a specified period of time. All my shares are in cash accounts and, by their policy and my instructions, they cannot be lent out for shorting purposes. I thought it interesting they are now willing to pay me for lending my shares. Someone must be in some trouble. Thought you might be interested.
Bradley S. Anderson

And MY ABSOLUTE FAVORITE

By Rob Mackinlay

If the US regulator’s current investigation into the silver futures market is looking at allegations of ongoing price manipulation it is the first of its kind – according to a former CFTC director of enforcement.

Previous Commodity Futures Trading Commission (CFTC) investigations have been into market manipulations that have already taken place. The potential for the current silver investigation to halt an ongoing manipulation could have significant implications for the price of silver.

Geoffrey Aronow, a partner at law firm Bingham McCutchen and Gregory Mocek a partner at McDermott Will & Emery, both former directors of the Division of Enforcement at the CFTC, said that the division would not be carrying out the investigation if there were not legitimate grounds for concern.

Aronow, who oversaw an investigation into manipulation of the global copper market in the late 1990s, said: “I don’t know if this is allegedly ongoing conduct that an investigation will stop. Usually, an investigation occurs after the behaviour stops and the price moves back to where it’s supposed to be in an ‘unmanipulated’ market.”

“Usually what’s happened is that the conduct has stopped. The evidence that there was price movement back to a new equilibrium is in fact part of the indication that there may have been a manipulation. Usually the return to a ‘normal’ equilibrium is pointed to as further evidence that there was manipulation. Now I don’t know if that’s the argument here.”

However the existence of long-term manipulation is an issue of contention in itself. Aronow said: “One of the things I will observe is that anyone who has looked at manipulation would say they [manipulations] can only be maintained over the short-term. So most of the time what you have are short-term manipulations. Prices spike and that becomes part of the investigation.”…

www.investegate.co.uk/invarticle.asp...

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