Appeals Court Overturns Dismissal in JP Morgan Silver Rigging Case
US Appeals Court overturns Dismissal in Silver Rigging Case against JPMorgan
The Appeals court rejected Judge Engelmeyer’s claim that the plaintiffs did not prove JPMorgan made “uneconomic bids” in the silver forward’s markets.
New Discovery May Win the Case for against JPMorgan
Summary
The New York 2nd U.S. Circuit Court of Appeals ruled yesterday that District Court Judge Engelmayer was in error when he dismissed the Silver price rigging lawsuits against JP Morgan. The appellate court felt that Engelmayer’s dismissal reasons amounted to “impermissible fact finding” and placed too high of a bar in concluding that plaintiffs had not adequately plead their case.
This reversal of the June, 2016 dismissal means the case will go back to the district court for further litigation. This also means the plaintiffs will ask for and receive more discovery. This can win the case for them.
The Lawsuit Was Dismissed in June,2016
JPMorgan Chase & Co had won the dismissal of three private antitrust lawsuits, including from hedge fund manager Daniel Shak, accusing the largest U.S. bank of rigging a market for silver futures contracts traded on COMEX.The lawsuits accused JPMorgan of having in late 2010 and early 2011 placed artificial bids onto the trading floor, harangued employees at metals market COMEX to obtain prices it wanted, and made misrepresentations to a committee that set settlement prices.
Our report June 30, 2016 JPM Silver Decision Flawed
Why it Was Dismissed in June
U.S. District Judge Paul Engelmayer in Manhattan, however, said the plaintiffs, who also included traders Mark Grumet and Thomas Wacker, did not show that JPMorgan made "uneconomic" bids, or intended to rig the market at counterparties' expense.
He also questioned the plaintiffs' use of Silver Indicative Forward Mid Rates ("SIFO") as a benchmark for determining proper levels for the spreads in their lawsuits.
In fact on April 21st, 2016 JP Morgan urged the judge quash the litigation. JPMorgan insisted allegations that the bank monopolized the market were too vague to support antitrust claims. They urged the judge ot raise the bar for the plaintiffs' burden of proof.
The Appeals Court Overturns the Dismissal Yesterday
The appellate court held that the plaintiffs did in fact submitted evidence that did in fact reach a level warranting further investigation. Therefore, the case should not have been dismissed.
In quoting the law, the 3 judges stated:
A plaintiff need only allege enough facts ‘to raise a right to relief above the speculative level,’ and ‘state a claim to relief that is plausible on its face.’
