Why CFTC Drops Silver Prices Case

WASHINGTON (Oct 1)  The CFTC decision followed a decision six months earlier by a U.S. District Court to dismiss a class-action lawsuit claiming silver price manipulation against JPMorgan Chase (NYSE: JPM).

The CFTC spent more than 7,000 hours reviewing data on silver positions and related derivatives.

There was a difference between this investigation and others previously conducted by the Commission.

In prior inquiries, the CFTC said it found no evidence of wrongdoing. But in this latest investigation, it stated it had not found sufficient evidence to bring a case.

The CFTC statement said: "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."

In other words, they may have found something. But the CFTC must have felt it wasn't enough to win a case against high-paid Wall Street lawyers.

This decision highlights the fact that regulators face very stiff obstacles in proving market manipulation despite the expanded powers the CFTC received in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

But the CFTC's own data reveals some interesting facts. . .