JPMorgan Chase & Co. (JPM - Free Report) can now heave a sigh of relief as a 2nd U.S. Circuit Court of Appeals has dismissed a lawsuit against the bank, pertaining to silver price fixing. The news was confirmed by Reuters on Thursday.
Earlier, in March 2013, the aforementioned case was turned down by Manhattan U.S. District Judge Robert Patterson. However, investors had appealed against the judgment.
It was alleged that in an attempt to maximize its profit, JPMorgan had manipulated the price of silver from 2007 to 2010. This resulted in huge losses for investors who traded in COMEX silver futures and options contracts during the said period.
Investors accused JPMorgan of rigging the silver price downwards to derive benefit from the huge short position that it maintained in the market. The company was also imputed of engaging in “late day trading”, which though not illegal, is an unethical form of trading.
While dismissing the case, the Circuit Court of Appeals stated that the investors lacked substantial evidence to prove their point. Further, the mere presence of considerable short positions does not make JPMorgan guilty of wrongdoing.
Apart from JPMorgan, HSBC Holdings plc (HSBC - Free Report) was accused of price rigging. Notably, silver investors had filed nearly 43 complaints against several banks in 2010 and 2011, which included the aforementioned company. Later, the individual lawsuits were combined into one and eventually, HSBC got respite from the same.
JPMorgan currently carries a Zacks Rank #3 (Hold). Some better-ranked major regional banks include KeyCorp (KEY - Free Report) and Wells Fargo & Company (WFC - Free Report) . Both these stocks have a Zacks Rank #2 (Buy).