CFTC Closes Investigation of Silver Markets without Recommending Enforcement Actions

On September 25, 2013, the CFTC’s Division of Enforcement announced it has closed the investigation that was publicly confirmed in September 2008 concerning silver markets without recommending any charges.  Although the CFTC rarely comments on opening or closing investigations, the CFTC felt is appropriate to inform the public because the investigation was confirmed back in 2008.  The CFTC maintains that based on current state of the law and evidence, there are no grounds to bring charges.

In September 2008, the CFTC confirmed that its Division of Enforcement was investigating complaints of misconduct in the silver market.  The Commission received complaints concerning whether silver futures contracts traded on the Commodity Exchange, Inc. (COMEX) were being manipulated.  Complaints pointed to differences between prices in the silver futures contracts and prices in other silver products, and generally concluded that because the prices for retail silver products has increased, the prices for silver contracts should have increased as well.  The Division of Enforcement claims its investigation used more than seven thousand enforcement staff hours to review and analyze position and transaction data, and other documents and information, and interviewed witnesses.  The Division’s investigation included an evaluation of silver market fundamentals and trading within and between cash, futures and over the counter
markets.  The CFTC’s Division of Market Oversight continued surveillance of the silver market contemporaneously to the Division of Enforcement’s investigation.  In the end, there was not sufficient evidence to recommend charges.

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