Banking Cartel, Fraud, and Antitrust - Where is the Enforcement Action?

Tue, Nov 17, 2015 - 10:58am

At some point, certainly, the concept cannot be lost on law enforcement officials that the banking cartel selling massive paper futures, naked or not, are perhaps violating the law. I say this somewhat in jest, because also at this point, there is clear evidence of the banking cartel taking massive, concentrated, short positions on the Comex, something the CFTC could, but won’t, do anything about.

Is the banking cartel engaged in fraud by selling naked shorts? The simple answer is not likely.

One way to look at the shenanigans on the Comex are through the prism of lawyers’ eyes, using state common law, such as fraud, deceit and misrepresentation. On the surface, it seems that the cartel banks engage in fraud on a daily basis, as they naked short the metals, causing massive price declines, which they then close out for huge profits at the bottom, only to do it again and again at opportune times like when the FOMC minutes are front run and the cartel banks make guaranteed profits. This is unfair, particularly to the longs that unwittingly buy the cartel’s paper, only to watch waterfall declines and stop runs, wiping out the pitiful longs, time and time again.

In the law there are several types of fraud.

In California, “fraud” and “deceit” are defined in California Civil Code sections 1572, 1709, and 1710. Civil Code section 1709 defines “deceit” generally as, “One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.” Civil Code section 1710 specifies four kinds of deceit:

“A deceit, within the meaning of [section 1709], is either:

The suggestion, as a fact, of that which is not true, by one who does not believe it to be true [intentional misrepresentation of fact];

The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true [negligent misrepresentation of fact];

The suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact [concealment or suppression of fact]; or,

A promise, made without any intention of performing it [promissory fraud].”

Subsection 2 of section 1710 covers negligent misrepresentations, whereas subsections 1, 3 and 4 cover intentional misrepresentations.

The tort of deceit or fraud requires: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974; see also Molko v. Holy Spirit Ass’n (1988) 46 Cal.3d 1092, 1108. Sometimes the tort of fraud or deceit is stated with four elements instead of five: (1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages. See Service by Medallion, Inc. v. Clorox Co., (1996) 44 Cal.App.4th 1807, 1816.

A representation must ordinarily be an affirmation of fact, as opposed to an opinion. Under the Restatement Second of Torts section 538A, a representation is an opinion “if it expresses only (a) the belief of the maker, without certainty, as to the existence of a fact; or (b) his judgment as to quality, value, authenticity, or other matters of judgment.” Mere “puffing,” or sales talk, is generally considered opinion, unless it involves a representation of product safety. Hauter v. Zogarts (1975) 14 Cal.3d 104, 112.

“A misrepresentation need not be oral; it may be implied by conduct.” Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1567. Moreover, false representations made recklessly and without regard for their truth in order to induce action by another are the equivalent of misrepresentations knowingly and intentionally uttered. Yellow Creek Logging Corp. v. Dare (1963) 216 Cal.App.2d 50, 55.

“A ‘complete causal relationship’ between the fraud or deceit and the plaintiff’s damages is required. ... Causation requires proof that the defendant’s conduct was a “‘substantial factor’” in bringing about the harm to the plaintiff.” Williams v. Wraxall (1995) 33 Cal.App.4th 120, 132.

However, taking a careful look at the required elements to prove fraud, at least here in California, leads to a reasoned conclusion that the cartel banks are not engaging in fraud, because there is no misrepresentation taking place. They are simply selling what someone else is buying. That they are doing it in a managed pattern with superior knowledge to those hapless victims taking the opposite side of their transactions, is not fraud. There can be no fraud without justifiable reliance on the misrepresentations. Even if one wanted to make out a case of concealment fraud, none of the cartel banks are in a relationship that would give rise to a claim for concealment, because absent a suitable relationship, there is no actionable claim of concealment fraud that can be made.

Hence, the only way to make a case for fraud, would be if the cartel banks sold a short, that they could not deliver, thus knowingly making a promise with no intention of performing. Then, the Comex would step in and let their remedies work per the Comex rules. The buyer of the short would demand a remedy for the cartel bank failure to deliver. The remedy is not in kind, that is, delivery of metal; rather, the remedy is payment in fiat. After that, if the Comex wanted to punish the bank for selling a naked short, well, they could, and how would that matter to the buyer of the metal that did not get delivery? Further, the buyer could initiate a state court action and sue the cartel bank for fraud, that is, misrepresenting that they had a quantity of metal that they were selling when instead they had no such metal, thus engaging in common law fraud. But again, the remedy to the defrauded buyer would not be getting metal in exchange for being defrauded. The only remedy would be payment of fiat, after a judgment (or settlement, if the parties to the lawsuit wanted to resolve the case short of trial).

Hence, even if the banks were knowingly selling unbacked paper metal, there is no likely result that is going to end up in metal changing hands.

So, in this context, since the primary governing agency is unwilling or unable to stem the apparent manipulation of paper metal, through the primary and obvious means intended, some of us wondered if other laws or concepts might apply to show the illegality of what the cartel banks are doing.

Indeed, there are other laws, right on the books, that have been used before, to stop these illegal practices dead in their tracks, in areas of commerce other than on the Comex. One such concept are the laws known as antitrust laws, under the Sherman Act and Clayton Act. It is illegal for anyone to enter into a “contract, combination or conspiracy in restraint of trade.”

How hard would it be for someone, anyone, in the justice department, or in any of the 50 states Attorney Generals’ offices, to initiate a Sherman Act or Clayton Act antitrust action against any one of the cartel banks? Why are the banks off-limits on the very type of conduct that the Sherman Act was designed to curtail?

Mr. TF analyzes the COT report regularly, and in so doing, the positions of the cartel banks are without question, proof of massive, concentrated shorts. This “combination” is by definition, part of the conduct that the Sherman Act is designed to make illegal. It does not have to be a purposeful conspiracy, it only need be a combination.

The concept is crystal clear. Take for example, two gas stations on opposite corners. If each station owner sat down at breakfast, and made an oral promise that both would raise prices by ten cents, and if they then did both raise prices, then they both would be in violation of the Sherman Act, for entering into a combination in restraint of trade, that is, to artificially increase the price paid by consumers for their products.

It is a no-brainer.

But why no action by any law enforcement?

Answer that question and one is enlightened, and understands why we stackers stack.

About the Author


Nov 17, 2015 - 2:22pm


If you confiscate someones vehicle and money prior to them being convicted, have you not hampered their ability to mount a defense?

Following the law means (If you believe in the constitution): innocent until proven guilty. Not steal first and then if they are eventually found innocent return their stuff.

Nov 17, 2015 - 2:09pm


Glad to hear it, also glad to hear about honest bankers.

But the numbers don't lie. Somebody, in some jurisdiction, is taking more from the populace than the populace is taking from each other.

The Rule of Law is a powerful thing, and it's a LOT like Confidence.

Lose confidence in a currency due to wanton debasement and it's Zimbabwe time.

Lose respect for the rule of law due to abuse by the lawmakers or law enforcers and it's chaos time.

The powers over money creation and lawmaking/enforcing are tempting a beast that is uncontrollable and will eat everything in its path. Hope the price they took for their souls was worth it if this keeps up.

I do find it very interesting that civil assets that are stolen (i.e. the courts agree to return the fraudulently taken items) don't result in ANY penalties for the Police. This means that taking assets is a free call option for the Police force. That's called moral hazard. The banks know that one well...

Nov 17, 2015 - 2:05pm


Death penalty should be repealed.

Nov 17, 2015 - 2:03pm


I can only speak for myself and my jurisdiction. I have done my share of civil forfeitures and taken property. The filing of the forfeiture was always in conjunction with criminal cases. No forfeiture order was issued until a conviction was concluded. No returned. Different ownership, property returned unless a codefendant. At the local level, most of the forfeitures were associated with drug trafficking or sales. No forfeiture for a college student having a joint in his car or some drugs determined to be a personal possession case.

However, if we could condemn $50000 in drug money during a take down of a dealer...we would. If we could take a vehicle of a mule coming out of Texas with $100000 of cocaine in a secret compartment of a 700 Series BMW owned by the person that was the designated recipient of the cocaine...and served with notice of his court date and failed to appear...then we took the drugs and car.

Not saying things that you say didn't happen. They just didn't happen in our jurisdiction.

Peter S
Nov 17, 2015 - 2:01pm


Craig, I understand the sentiment. After all, the Rothschilds alone are arguably directly responsible for the deaths of hundreds of millions of people in the wars they orchestrated (controlling both sides, from the US Civil War on, and likely before--pray tell, who made the money from the US Revolutionary War extending as long as it did, of course, the Rothschilds who sold the Hessian troops to the British), the genocides (Rothschilds, Schiffs, and Warburgs financed the Bolsheviks--see for example Rabbi Marvin Antleman's To Eliminate the Opiate Vol. I and numerous other sources--and hence assuredly directed the Bolsheviks in the slaughter of 60M innocents that followed). Let alone the manufactured collapses after manufactured booms (someone is culpable for the estimated 7M Americans who died during the Great Depression in the 1930s, due to the depression conditions). But violence, vengeance, brutality, cruelty--those are their game. In fact, for whatever occult and sick reasons, they appear to feed off of these emotions, and orchestrate our public reality to invoke these. They appear to be empowered by these kinds of emotions, whether we are fighting one another, or whether we are directing rage and anger at them. What disempowers us, empowers them. Conversely, what empowers us, disempowers them. The only right to kill, and there is an inalienable right to kill, is in self-defense (of self or others). But that's a last resort. Let's act in humane and human-centered ways, which in its own way is a form of telling them to f _ _ _ off. In a kind and humane way, of course . . . : ) If the Rothschilds and all of their syndicate partners and all of their toadies and operatives and stooges are either criminally prosecuted where appropriate, all of their institutions and organizations shut down, forever, and at the very least, every penny they've looted, stolen, and defrauded from the American people and the peoples of the world have been clawed back (yes, I know it's all hidden decades or centuries ago in international trusts and other devices their operatives and agents created and crafted into "the law" and hence their stolen wealth is all off grid from any jurisdiction), I think we will have repose, and don't need and won't want vengeance, which will just degrade us when we need to do the opposite. It is time we put this all to right . . .

Nov 17, 2015 - 1:59pm

The Comex creation explains a lot

Thanks Cal, great article. There is a reason Comex started business the day before American's could purchase investment gold. It should be criminal that a physical commodity can be represented by paper bets 300 to 1 but that isn't going to change until the Comex market itself is challenged by other options like the SGE and Bullion Capitals soon to be opened physical exchange.

Don't forget what Xi said,"pure gold fears no fire". He sure as Hell isn't talking about the Comex paper BS inserting the word PURE. The more I think about that statement, the more I like it.

Nov 17, 2015 - 1:48pm

Not enforced?!

Come on, the laws are being enforced, check this out:

Police Civil Asset Forfeitures Exceed The Value Of All Burglaries In 2014

Submitted by Martin Armstrong via,

Between 1989 and 2010, U.S. attorneys seized an estimated $12.6 billion in asset forfeiture cases. The growth rate during that time averaged +19.4% annually.

In 2010 alone, the value of assets seized grew by +52.8% from 2009 and was six times greater than the total for 1989.

Then by 2014, that number had ballooned to roughly $4.5 billion for the year, making this 35% of the entire number of assets collected from 1989 to 2010 in a single year.

Now, according to the FBI, the total amount of goods stolen by criminals in 2014 burglary offenses suffered an estimated $3.9 billion in property losses. This means that the police are now taking more assets than the criminals.

The police have been violating the laws to confiscate assets all over the country. A scathing report on California warns of pervasive abuse by police to rob the people without proving that any crime occurred. Even Eric Holder came out in January suggesting reform because of the widespread abuse of the civil asset forfeiture laws by police.

Bloomberg News has reported now that Stop-and-Seize authority is turning the Police Into Self-Funding Gangs. They are simply confiscating money all under the abuse of this civil asset forfeiture where they do not have to prove you did anything. the U.S., I see some troubling signs of a shift toward low-end institutions. Bounty hunting was a recent example (now happily going out of style). Another example is the use of private individuals or businesses to collect taxes, a practice known as tax farming. A third has been the extensive use of mercenaries in lieu of U.S. military personnel in Iraq and elsewhere. Practices such as these can save money for the government, but they encourage abuses by reducing oversight.

I’ve recently been reading about an even more worrying example of low-end statecraft: Stop-and-seize. This term refers to a practice, increasingly common since the turn of the century, of police confiscating people’s property without making an arrest or obtaining a warrant. That may not sound legal, but it is! The police simply pull you over and take your money.

A Washington Post investigative report from a year ago explains:

"[A]n aggressive brand of policing [is spreading] that has spurred the seizure of hundreds of millions of dollars in cash from motorists and others not charged with crimes...Thousands of people have been forced to fight legal battles that can last more than a year to get their money back.

Behind the rise in seizures is a little-known cottage industry of private police-training firms…

A thriving subculture of road officers…now competes to see who can seize the most cash and contraband, describing their exploits in the network’s chat rooms and sharing “trophy shots” of money and drugs. Some police advocate highway interdiction as a way of raising revenue for cash-strapped municipalities.

“All of our home towns are sitting on a tax-liberating gold mine,” Deputy Ron Hain of Kane County, Ill., wrote in a self-published book under a pseudonym…Hain’s book calls for “turning our police forces into present-day Robin Hoods.”

With government unable to pay police as much as they need or would like, police are confiscating their revenue directly from the populace.

The threat to individual liberty from stop-and-seize is painfully clear. Without requirements for an arrest or for a warrant, the power to confiscate cash is a clear diminution of property rights. Effectively, the police have been given official sanction to commit literal highway robbery without the threat of punishment. People whose property was seized must pay a lot of money and spend a long time in court for even the chance of getting it back, and police who seize money with no good reason don't, apparently, suffer any threat of discipline.

But stop-and-seize also presents a danger to public trust.

Prosecutors are now instructing police on how to confiscate money within the grey area of the law.

A class action lawsuit was filed against Washington DC where police were robbing people for as little as having $100 in their pocket.

This is getting really out of hand and it has indeed converted police into legal criminals or “gangs” as Bloomberg News calls them.

Nov 17, 2015 - 1:44pm


Tried to update and respond but my iphone wiped out my answer. Try again,

Yes, Civil and Criminal statutes are similar but the burden of proof in a criminal case is more stringent. The real concern with the usurped legal system in Washington is that the perpetrators and the leaders and law makers are the same people. Thus, the reluctance to do criminal cases.

The SEC, CFTC would rather (by direction) pursue Civil actions and minimal fines against banks and Wall Street because it gives the appearance of taking action against "criminals". But these minimal fines do nothing about stopping the thefts.

If a Civil investigation by any Regulator appears on its face to be a criminal action, then it is incumbent upon the "Regulator" to forward the case/investigation to an agency like The Justice Department or FBI who does have Criminal Authority. These investigations would then go before "citizens" of the US by way of a Federal Grand Jury.
But rather than proceed according to the Constitution and the Laws of the US, they have been "directed" to stand down criminally, thereby protecting bankers, Treasury, PPT, and elected officials to name a few. There is "NO" credibility to the argument that putting high management or CEOs in jail would disrupt the banking system. It may stop the criminal acts and that would be disruptive. It also might pierce the veil or open Pandora's Box as to the corruption and criminality of the system itself. THAT IS WHY CRIMINAL ACTION OR IMPEACHMENT ACTION IS CRITICAL.

Also the powers that be, believe that taking a civil action will somehow convince the people that the action is over and that double jeopardy somehow attaches. IT DOESN'T. These criminal actions can be pursued in addition to civil actions And, the fact there is a Criminal conviction doesn't preclude a Civil Action.

Also, there is nothing precluding a State Attorney General taking criminal action either by themselves, in concert with other State AGs...even if the US fails to take action, takes Civil Action or Criminal Action. The States are simultaneously "offended" by criminal acts where the party or corporation does business with that State. Do you think JPM, Goldman, CITI, Wells Fargo, Morgan Stanley, etc doesn't do business with just about every State.

What we have here is a Co-opted Federal Government that has issued orders to their Regulators to Stand Down and Congress sitting on their hands hoping the whole thing wll go away. We also have State Regulators and Law Enforcement afraid to go against the lawyers of Wall Street. Then we have a Federal Appeals Court System ready to slam any criminal action in favor of the "Criminals"

That is my point: A Civil Action is great to squeeze some coins out of the perps, but a Criminal Action is the only way to make it stop.

Issue: Where is there a Criminal Agency that will do their job?

Hope this shows up on the site as....

Added: @PeterS: no Statute of Limitations as it is an ongoing criminal act of market manipulation, fraudulent derivatives and instruments, etc. Ongoing acts become one act and can be joined and can be treated as current from the date of the last similar act.

Nov 17, 2015 - 1:42pm


We have not gone there today, but there is a strong argument that those involved in these crimes have committed Treason. That could be why they are reluctant to go the criminal route. Then again, that justifies Criminal Action even more and opening up the Death Penalty to consideration.

I guess if you are going to do a Crime, make it a big one.

Nov 17, 2015 - 1:36pm

After you fine gentlemen adjudicate the crimes...

Here's my favored sentencing option:

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