CFTC Silver Investigation Done, Findings ‘Not Surprising’ Wednesday September 25, 2013 2:48 PM The Commodity Futures Trading Commission closed its second investigation into silver futures market manipulation and market participants said they weren’t surprised by the news. The agency said Wednesday it ended its five-year-old probe into the silver markets and found no evidence to charge any firm or employees with wrongdoing. “Based upon the law and evidence as they exist at this time, there is not a viable basis to bring an enforcement action with respect to any firm or its employees related to our investigation of silver markets,” the CFTC said Wednesday. (See related story for more information) “I’m not surprised by the news at all,” said David Morgan, independent precious-metals analyst with Silver-Investor.com, who believes there is some sort of manipulation going on. Several other silver market watchers contacted by Kitco News immediately after the news came out echoed this view. “This is not surprising in the least,” said Sterling Smith, futures specialist, commodity research at Citibank Institutional Client Group. The biggest issue, said Morgan and Erica Rannestad, commodity analyst, CPM Group, is that it’s hard to prove manipulation. “It’s really hard to prove manipulation. The silver market has multiple hubs, silver is traded globally, 24/7,” she said. Investigators need hard evidence, she said, such as an incriminating email in order to prove manipulation. Silver market participants have complained for decades about possible manipulation in the market, with the CFTC saying in 2008 it’s received complaints for 20 to 25 years about possible misconduct. The silver market has seen manipulation in the past. In 1979-1980 the Hunt Brothers tried to corner the silver market and pushed up prices from about $6 an ounce to over $48 before the Comex exchange changed the rules on leverage and put heavy restrictions on commodities bought on margin. The Hunt brothers lost over $1 billion in the incident. The current investigation centered around complaints that silver prices were being pushed artificially lower. Smith said the CFTC’s disclosure is unlikely to matter to those who believe the market is being manipulated. “I don’t think that this will do anything to change their minds,” he said. Morgan said he believes that given how the CFTC worded its disclosure still leaves the opportunity to revisit the topic. “Legally this is how they have to stand, but if you look at what they said, they said based on the ‘evidence at this time,’ that still opens the door for investigation,” he said.