I had the opportunity yesterday to connect with lead counsel of the Silver Class Action Complaint, Christopher Lovell, partner of New York City law firm, Lovell Stewart Halebian Jacobson LLP. It was a fascinating interview, as Chris and his firm have won many of the largest settlements in commodity exchange act & antitrust law history, with their highest recovery being over $1.02 billion dollars.

During the interview Chris provided an update on the silver class action complaint, as well as announcing a key missing ingredient, one which may be needed for the survival of the case. 

Starting out with, Chris explained that, “The status of the action is that the court ruled the [silver] complaint and all [it's] claims will be dismissed, unless plaintiffs are able to improve their allegations.”

In response to the court dismissal, Chris said, “The plaintiffs have filed a proposed amended complaint, and the defendants (JP Morgan), have opposed the motion, and the plaintiffs have replied, and the motion is pending before the court to make a determination. The normal procedure in a case, is that a complaint is filed to start the action, then the defendants respond either by answering, or making a motion to dismiss. Here they made a motion to dismiss, [and] that might indicate that the case isn’t as strong as those cases in which an answer is filed. Because after an answer is filed, discovery goes forward.”

In discussing merits presented in the amended complaint, Chris stated that, “The commodity futures markets involve confidentiality of orders, [and] we have not specifically alleged emails or specific orders, or specific trades in the complaint. We have alleged though, large positions, the percentage of the market the large positions constituted, and plaintiff’s experts estimates of the suppressing effect on silver prices the positions hadUnfortunately we did not set forth the exact size of the positions, nor the exact size of the trades. We did however, give the percentages of the total open interest, percentage concentrations, in terms of estimates and ranges…We’ve also alleged large trades on two or three specific days during the class period. But ‘large’ is about as specific as we’ve been, [and] we haven’t alleged any numbers.”

Speaking on the missing ingredient needed to take the strength of this case to a higher level (or potentially for it’s survival), Chris said that, “We tried to supply the extra material to make enough points…to overcome our lack of having any [insider] emails or things like that, that you would have from a government investigation, or even having someone who is sometimes called a ‘canary’—who gives specifics from inside the company, or even exact amounts of the positions of the trades…I’ve been doing these commodity manipulation cases since 1976, many times we have had quite a bit more detail in the complaints then we have [now]….[So] if anyone has credible information about the conduct of JP Morgan or others in the silver market during the class period, we would appreciate receiving it…the class period begins in March 2008, and runs until the end of October 2010.”

It is also worth noting, that Chris and his law firm have already invested many hundreds, and quite possibly over 1,000 hours of labor and resources into this case so far. He said, “We pay economists and investigators, and we have had cases where we put in more than a million dollars in costs in checks that we wrote into the case, and the case was not successful. In addition to that, we have the attorney’s salaries and [overhead].”
Bottom Line: The silver manipulation case is on the edge of being thrown out for good. After investing many hundreds of thousands of dollars into this case so far, Chris is humbly asking for help from the market. It appears that insider emails or a ‘canary’ may be the missing ingredient needed to keep the case alive.

To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to to your desktop:

>>Interview with Christopher Lovell (MP3)

To learn more about Chris’ New York law firm visit: LSHLLP.com

To read the amended complaint filed in this case: Click Here

As final note, GATA.org has championed the metals manipulation issue for many years now, and the best way to make a difference is by making a donation to GATA.

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Tekoa Da Silva
Bull Market Thinking