US Authorities Build Case Against JP Morgan Over Market Manipulation For Precious Metals
Mike Papantonio, 29 February 2020
Via America’s Lawyer: RT correspondent Michele Greenstein joins Mike Papantonio to walk us through a developing criminal case against bank behemoth JPMorgan, which is being accused yet again of manipulating precious metals markets for the express profit of its own clients and investors.
Mike Papantonio: Federal prosecutors are turning their attention towards bank behemoth JP Morgan, which is accused of manipulating gold and silver prices for the benefit of their clients and their shareholders. Michele Greenstein joins me now to explain what’s happening with this case. First off, run us through these allegations, Michele, you’ve covered this story a fair amount. It’s, it’s a story that again, corporate media isn’t covering this one. What is your take on this story?
Michele Greenstein: Well, US authorities are building a case, although formal accusations have not been made against the bank, but according to two people who are familiar with the matter who spoke with Bloomberg news, US authorities, like we said, are building a criminal case against JP Morgan. Now both the bank and the DOJ declined to comment, but a bank spokesperson did confirm that the DOJ is investigating “trading practices in the metal market and related conduct.” So Pap, what we’re talking about here is metal market manipulation that is intentionally misleading or spoofing members of the metals market. So gold, silver, platinum, palladium, all of these are the precious metals, right? And what market manipulation looks like is this.
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Manhattan District Court Writes Final Chapter in Litigation Between Internet Law Library and Hedge Fund Adviser Southridge Capital Management; Orders Tech Firm to Pay Adviser Almost $1.2 Million in Attorney’s Fees on Top of Damages
Alisa Greenstein, Hedge Fund Law Report, 27 August 2010
On August 9, 2010, the United States District Court for the Southern District of New York (Southern District) effectively ended the decade-long litigation between Internet Law Library, Inc. (INL), its executives and several of its shareholders, and Southridge Capital Management, LLC (Southridge), its principals and affiliates, including hedge fund Cootes Drive, LLC, and its broker, Thomson Kernaghan & Co., Ltd. (TK & Co.). The litigation arose out of a “floorless” or “toxic” convertible securities purchase agreement between INL and Cootes Drive.
The agreement allowed Cootes Drive to demand conversion of its INL preferred stock into common stock based on a floating conversion ratio tied to the common stock’s market price, and obligated Cootes Drive to float a $25 million line of equity, so long as INL common stock remained priced above a certain level. This arrangement arguably provided Cootes Drive and its affiliates with an incentive to aggressively short-sell INL common stock, because the further they decreased its price, the more common stock Cootes Drive could obtain on conversion (which it could use to cover its short positions and profit from the difference), and because that decrease would eliminate its obligation to provide a line of equity. The agreement proved disastrous for INL, just as it has for many other companies with similar financing arrangements. Continue reading “Article: Manhattan District Court Writes Final Chapter in Litigation Between Internet Law Library and Hedge Fund Adviser Southridge Capital Management; Orders Tech Firm to Pay Adviser Almost $1.2 Million in Attorney’s Fees on Top of Damages”