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Andrew
McGuire Emails
Here are
transcripts of the emails between Andrew McGuire, a London metals trader and the Commodity Futures Trading
Commission (CFTC).
He is warning them about a planned manipulation of
the silver market for Feb. 5, 2010
From: Andrew Maguire
Sent: Tuesday, January 26, 2010 12:51 PM
To: Ramirez, Eliud [CFTC]
Cc: Chilton, Bart [CFTC]
Subject: Silver today
Dear Mr. Ramirez:
I thought you might be interested in looking into the silver trading today.
It was a good example of how a single seller, when they hold such a concentrated position in the very small silver
market, can instigate a selloff at will.
These events trade to a regular pattern and we see orchestrated selling
occur 100% of the time at options expiry, contract rollover, non-farm payrolls (no matter if the news is bullish or
bearish), and in a lesser way at the daily silver fix. I have attached a small presentation to illustrate some of
these events. I have included gold, as the same traders to a lesser extent hold a controlling position there
too.
Please ignore the last few slides as they were part of a training session I
was holding for new traders.
I brought to your attention during our meeting how we traders look for the
"signals" they (JPMorgan) send just prior to a big move. I saw the first signals early in Asia in thin volume. As
traders we profited from this information but that is not the point as I do not like to operate in a rigged market
and what is in reality a crime in progress.
As an example, if you look at the trades just before the pit open today you
will see around 1,500 contracts sell all at once where the bids were tiny by comparison in the fives and tens. This
has the immediate effect of gaining $2,500 per contract on the short positions against the long holders, who lost
that in moments and likely were stopped out. Perhaps look for yourselves into who was behind the trades at that
time and note that within that 10-minute period 2,800 contracts hit all the bids to overcome them. This is hardly
how a normal trader gets the best price when selling a commodity. Note silver instigated a rapid move lower in both
precious metals.
This kind of trading can occur only when a market is being controlled by a
single trading entity.
I have a lot of captured data illustrating just about every price takedown
since JPMorgan took over the Bear Stearns short silver position.
I am sure you are in a better position to look into the exact
details.
It is my wish just to bring more information to your attention to assist you
in putting a stop to this criminal activity.
Kind regards,
Andrew Maguire
From: Ramirez, Eliud [CFTC]
To: Andrew Maguire
Sent: Wednesday, January 27, 2010 4:04 PM
Subject: RE: Silver today
Mr. Maguire,
Thank you for this communication, and for taking the time to furnish the
slides.
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]
Sent: Wednesday, February 03, 2010 3:18 PM
Subject: Re: Silver today
Dear Mr. Ramirez,
Thanks for your response.
Thought it may be helpful to your investigation if I gave you the heads up
for a manipulative event signaled for Friday, 5th Feb. The non-farm payrolls number will be announced at 8.30 ET.
There will be one of two scenarios occurring, and both will result in silver (and gold) being taken down with a
wave of short selling designed to take out obvious support levels and trip stops below. While I will no doubt be
able to profit from this upcoming trade, it is an example of just how easy it is to manipulate a market if a
concentrated position is allowed by a very small group of traders.
I sent you a slide of a couple of past examples of just how this will play
out.
Scenario 1. The news is bad (employment is worse). This will have a bullish
effect on gold and silver as the U.S. dollar weakens and the precious metals draw bids, spiking them higher. This
will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added, overcoming
any new bids and spiking the precious metals down hard, targeting key technical support
levels.
Scenario 2. The news is good (employment is better than expected). This will
result in a massive short position being instigated almost immediately with no move up. This will not initially be
liquidation of long positions but will result in stops being triggered, again targeting key support
levels.
Both scenarios will spell an attempt by the two main short holders to
illegally drive the market down and reap very large profits. Locals such as myself will be "invited" on board,
which will further add downward pressure.
The question I would expect you might ask is: Who is behind the sudden
selling and is it the entity/entities holding a concentrated position? How is it possible for me to know what will
occur days before it will happen?
Only if a market is manipulated could this possibly
occur.
I would ask you watch the "market depth" live as this event occurs and tag
who instigates the move. This would surly help you to pose questions to the parties
involved.
This kind of "not-for-profit selling" will end badly and risks the integrity
of the COMEX and OTC markets.
I am aware that physical buyers in large size are awaiting this event to
scoop up as much "discounted" gold and silver as possible. These are sophisticated entities, mainly foreign, who
know how to play the short sellers and turn this paper gold into real delivered physical.
Given that the OTC market (where a lot of the selling occurs) runs on a
fractional reserve basis and is not backed up by 1-1 physical gold, this leveraged short selling, where ownership
of each ounce of gold has multi claims, poses a very large risk.
I leave this with you, but if you need anything from me that might help you
in your investigation I would be pleased to help.
Kind regards,
Andrew T. Maguire
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 2:11 PM
Subject: Fw: Silver today
If you get this in a timely manner, with silver at 15.330 post data, I would
suggest you look at who is adding short contracts in the silver contract while gold still rises after NFP data. It
is undoubtedly the concentrated short who has "walked silver down" since Wednesday, putting large blocks in the way
of bids. This is clear manipulation as the long holders who have been liquidated are matched by new short selling
as open interest is rising during the decline.
There should be no reason for this to be occurring other than controlling
silver's rise. There is an intent to drive silver through the 15 level stops before buying them back after flushing
out the long holders.
Regards,
Andrew
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Cc: BChilton [CFTC]; GGensler [CFTC]
Sent: Friday, February 05, 2010 3:37 PM
Subject: Fw: Silver today
A final e-mail to confirm that the silver manipulation was a great success
and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in
the full control of the parties we discussed in our phone interview? I have honored my commitment not to publicize
our discussions.
I hope you took note of how and who added the short sales (I certainly have
a copy) and I am certain you will find it is the same concentrated shorts who have been in full control since JPM
took over the Bear Stearns position.
It is common knowledge here in London among the metals traders that it is
JPM's intent to flush out and cover as many shorts as possible prior to any discussion in March about position
limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my
opinion as a result of the CFTC's allowing by your own definition an illegal concentrated and manipulative position
to continue.
Bart, you made reference to it at the energy meeting. Even if the level is
in dispute, what is not disputed is that it exists.
Surely some discussions should have taken place between the parties by now.
Obviously they feel they can act with impunity.
If I can compile the data, then the CFTC should be able to
too.
I would think this is an embarrassment to you as
regulators.
Hoping to get your acknowledgement.
Kind regards,
Andrew T. Maguire
From: Andrew Maguire
To: Ramirez, Eliud [CFTC]
Sent: Friday, February 05, 2010 7:47 PM
Subject: Fw: Silver today
Just logging off here in London. Final note.
Now that gold is undergoing short covering, please look at market depth
right now in silver and evidence the large selling blocks in a thin market being put in the way of silver regaining
the technical 15 level, which would cause a short covering rally and new longs being instigated. This is resulting
in the gold-silver ratio being stretched to ridiculous levels.
I hope this day has given you an example of how silver is "managed" and
gives you something more to work with.
If this was long manipulation in, say, the energy market, the shoe would be
on the other foot, I suspect.
Have a good weekend.
Andrew
From: Andrew Maguire
Sent: Tuesday, February 09, 2010 8:24 AM
To: Ramirez, Eliud [CFTC]
Cc: Gensler, Gary; Chilton, Bart [CFTC]
Subject: Fw: Silver today
Dear Mr. Ramirez,
I hadn't received any acknowledgement from you regarding the series of
e-mails sent by me last week warning you of the planned market manipulation that would occur in silver and gold a
full two days prior to the non-farm payrolls data release.
My objective was to give you something in advance to watch, log, and follow
up in your market manipulation investigation.
You will note that the huge footprints left by the two concentrated large
shorts were obvious and easily identifiable. You have the data.
The signals I identified ahead of the intended short selling event were
clear.
The "live" action I sent you 41 minutes after the trigger event predicting
the next imminent move also played out within minutes and exactly as I outlined.
Surely you must at least be somewhat mystified that a market move could be
forecast with such accuracy if it was free trading.
All you have to do is identify the large seller and if it is the
concentrated short shown in the bank participation report, bring them to task for market
manipulation.
I have honored my commitment to assist you and keep any information we
discuss private,however if you are going to ignore my information I will deem that commitment to have
expired.
All I ask is that you acknowledge receipt of my information. The rest I
leave in your good hands.
Respectfully yours,
Andrew T. Maguire
From: Ramirez, Eliud
To: Andrew Maguire
Sent: Tuesday, February 09, 2010 1:29 PM
Subject: RE: Silver today
Good afternoon, Mr. Maguire,
I have received and reviewed your email communications. Thank you so very
much for your observations.
The information presented in this newsletter is based on generally available news releases,
corporate filings, current events, interviews and the editor’s opinions. It may contain errors and you should not make
investment decisions based solely on what you believe you have read here. Do your own research, it is your
money. If you lose it, it is your
responsibility, not ours or your grandmothers! The editor may or may not have a position in any securities discussed. The editor may have held a position in a security
earlier, or in the future.
Investor
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