During the period under consideration, the average difference between NYMEX and LBMA prices was approximately 5 percent, and this fact undercuts the plaintiffs' claims about artificial silver prices on COMEX during this time, Patterson said.
Furthermore, he added that when the CFTC compares silver to another metal it does not limit its view to a relationship with gold, but also considers platinum and palladium.
In its report for its second silver manipulation investigation in 2008, the CFTC found that all four metals have similar price movements. During the period under consideration in this case, Patterson said “these four metals have, in general, continued to exhibit similar price trends and, in particular, silver has continued to outperform platinum and palladium.”
Even if the complaint had successfully proved that an artificial price existed, Patterson found that the plaintiffs failed to connect silver prices to JPMorgan.
In an effort to show firm's impact, the complaint points to March 25, 2010, when the CFTC held a public hearing on metal prices. After the exposure on the subject, JPMorgan allegedly reduced its short positions by a third. The plaintiffs argue that silver prices rose after this reduction.
One critical flaw in this argument is a failure to show a correlation between the hearing and rising prices “because prices did not actually increase until August 2010, more than five months after the hearing,” Patterson said.
The plaintiffs deem that certain price fluctuations “must have” been caused by JPMorgan because no other “information coming to the silver market” explained the price behavior at that time. Patterson found that this statement and others like it fail to allege specific conduct that might be reasonably attributed to the firm.
At one point, the plaintiffs' suit argues that it is “difficult to imagine anyone else, working alone, who had the ability to cause such large price declines in prices which, clearly, benefited JPMorgan at least three times more than any other trader.”