This is nothing more than window dressing, telling us they are doing something about the fraudulent practices. They have no intention of ending the manipulation. A similar tactic was implemented in 2006 when the LME defaulted on Nickel.

See Ted Butler's commentary from August 2006.

http://www.investmentrarities.com/ted_butler_comentary08-21-06.shtml

Ted proceeded to tie in the illegal short selling of Nickel at the LME, with the possibility of the same thing happening with Silver at COMEX.A few paragraphs follow:

“This is the real meaning of the LME’s delivery default. It is also the same thing with the short-side manipulation in COMEX silver. It is a coincidence that this LME nickel disaster has occurred precisely at the same time others and I have been alleging a manipulation in COMEX silver. However, nothing could prove our case more clearly.”

“What the LME has done in nickel is relieve the shorts of having to round up actual metal to deliver against their contractual promise to deliver, and unilaterally transferred the obligation to the longs, the industrial user. These industrial consumer longs (and other longs) entered into their nickel contracts voluntarily and legally, with the option of taking delivery. Now they are told, with no warning, they can’t take delivery and must secure metal elsewhere. The shorts don’t have to scramble for material they promised to deliver, the longs have to scramble for material they were legally promised to receive. Nothing could be more unfair.

Furthermore, as long as the shorts’ obligation to deliver nickel is suspended, there is no good reason for an industrial user to buy an LME contract. This is the greatest threat to the LME. And it’s not just deterrence for those buyers who want to take actual delivery. With the delivery mechanism destroyed in nickel, the linkage between the price of real metal and the LME contract is also destroyed. Without the requirement for delivery, the price of nickel on an LME contract and nickel in the real world loses its connection. In this case, the price of LME nickel is merely a figment of anyone’s imagination. What good does it do an industrial consumer to hedge on the LME, if there is no assurance his contract will converge with the price of actual metal on the delivery due date? Without the delivery mechanism, there is no linkage between paper contract and actual metal.

This is the real meaning of the LME’s delivery default. It is also the same thing with the short-side manipulation in COMEX silver. It is a coincidence that this LME nickel disaster has occurred precisely at the same time others and I have been alleging a manipulation in COMEX silver. However, nothing could prove our case more clearly.”

“A short-side manipulation, like those in LME nickel and COMEX silver, is evidenced by a concentrated short position and prices lower than would be without the concentrated short position. (The concentrated short position in nickel has been reported in news stories, while the concentrated short position in COMEX silver is reported by the CFTC). The regulators have little or no experience with short side manipulations, and since the concentrated shorts are industry insiders, rather than outside speculators, there is little incentive for the regulators to move against their own.”

“But the strongest message of the LME default is being sent to the silver industrial consumers of the world, because the biggest potential losers in nickel are the industrial users. If the LME can get away with suspending delivery requirements in nickel, how hard will it be for the COMEX to suspend delivery requirements in silver? Do you think the CFTC will come to your defense? The same CFTC that is stalling on the concentrated short issue in silver? Even more than those investors and speculators dealing in paper contracts, any user who is not stockpiling real silver inventories, in light of what just occurred on the LME, is missing the boat.”