Andrew Maguire (whistleblower)
Encyclopedia
Andrew Maguire is an independent bullion trader and a whistleblower
. He notified United States regulators that fraud had been committed, manipulating prices in the international gold and silver markets. Maguire and his wife were injured in a hit-and-run accident a day after he was identified as the source of the allegations.
trader. On March 29, 2010, he was interviewed on the radio with Gold Anti-Trust Action Committee
(GATA) board member Adrian Douglas. He went public in April 2010 with assertions of market manipulation by JPMorgan Chase and HSBC
of the gold and silver markets, prompting a number of lawsuits, including a class action lawsuit. Maguire said "JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses (on their short positions
) by the Fed and/or the U.S. taxpayer." "No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a JPMorgan spokesman. HSBC declined to comment.
gave a detailed account of Maguire's allegations to the Commodity Futures Trading Commission
(CFTC), stating how "JP Morgan Chase signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals alongside JPM. [He] explained how there are routine market manipulation
s at the time of option expiry, non-farm payroll data releases, and COMEX
contract rollover, as well as the ad-hoc events."
According to Maguire, the precious metals markets trade "pretty much in tandem", but because the silver market is so much smaller, it is harder to disguise one's activities and therefore easier to figure out who is behind a manipulative event. After Bear Stearns
and their short silver positions were acquired by JPMorgan, manipulative events in the silver market became more frequent. Maguire decided to inform the CFTC. He contacted commissioner Bart Chilton
, who had Eliud Ramirez, a senior investigator from the CFTC's enforcement division, get in touch with Maguire. Maguire explained the manipulations in great detail, both over the phone in an hour-long interview and afterward, in a series of e-mails with screen shots.
Maguire then predicted a manipulative event in the silver market and gave detailed information in an e-mail to the CFTC about what to expect, sending it on February 3, 2010, two days prior to the event. The event transpired exactly as Maguire predicted. While the event was taking place, Maguire sent e-mails in real time, pointing out certain details because the CFTC enforcement seemed not to know what to look for or how to interpret the data.
's Antitrust Division and the CFTC are conducting civil and criminal probes steming from a New York Post
article concerning Maguire's allegations. Following publication of the article, JPMorgan released a statement that they are not under investigation by the Department of Justice or the CFTC. The CFTC has interviewed 32 people and reviewed 40,000 documents, but as of May 2011, no action has been taken. On February 24, 2011, in less than an hour, the price of silver fell $1.50 per ounce before recovering. Another London-based trader, Richard Guthrie, wrote to Chilton to complain about the event, asking “How many investors lost money and positions to the financial benefit of an elite few?” Chilton believes violations of the law have taken place and wants to see prosecutions move forward, but the five-member commission has yet to act.
Whistleblower
A whistleblower is a person who tells the public or someone in authority about alleged dishonest or illegal activities occurring in a government department, a public or private organization, or a company...
. He notified United States regulators that fraud had been committed, manipulating prices in the international gold and silver markets. Maguire and his wife were injured in a hit-and-run accident a day after he was identified as the source of the allegations.
Background
Andrew Maguire has 40 years of experience as a trader and is a former Goldman SachsGoldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
trader. On March 29, 2010, he was interviewed on the radio with Gold Anti-Trust Action Committee
Gold Anti-Trust Action Committee
The Gold Anti-Trust Action Committee is an organization dedicated to investigating and proving its allegation that the quantity of gold held and traded by the world's central banks, international bullion banks and futures exchanges is significantly overstated and that a scheme analogous to the...
(GATA) board member Adrian Douglas. He went public in April 2010 with assertions of market manipulation by JPMorgan Chase and HSBC
HSBC
HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
of the gold and silver markets, prompting a number of lawsuits, including a class action lawsuit. Maguire said "JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses (on their short positions
Position (finance)
In financial trading, a position is a binding commitment to buy or sell a given amount of financial instruments, such as securities, currencies or commodities, for a given price....
) by the Fed and/or the U.S. taxpayer." "No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a JPMorgan spokesman. HSBC declined to comment.
Market Manipulation
GATA chairman Bill MurphyBill Murphy (GATA chairman)
Bill Murphy is a former American professional football player, financial commentator, and the chairman and director of the Gold Anti-Trust Action Committee , which was founded as a result of Murphy's essays on collusion among large financial institutions to suppress the price of precious metals...
gave a detailed account of Maguire's allegations to the Commodity Futures Trading Commission
Commodity Futures Trading Commission
The U.S. Commodity Futures Trading Commission is an independent agency of the United States government that regulates futures and option markets....
(CFTC), stating how "JP Morgan Chase signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals alongside JPM. [He] explained how there are routine market manipulation
Market manipulation
Market manipulation describes a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency...
s at the time of option expiry, non-farm payroll data releases, and COMEX
Comex
Comex may refer to:*COMEX, a division of the New York Mercantile Exchange *COMEX , a French company in undersea engineering*COMEX, a gold trust owned by iShares...
contract rollover, as well as the ad-hoc events."
According to Maguire, the precious metals markets trade "pretty much in tandem", but because the silver market is so much smaller, it is harder to disguise one's activities and therefore easier to figure out who is behind a manipulative event. After Bear Stearns
Bear Stearns
The Bear Stearns Companies, Inc. based in New York City, was a global investment bank and securities trading and brokerage, until its sale to JPMorgan Chase in 2008 during the global financial crisis and recession...
and their short silver positions were acquired by JPMorgan, manipulative events in the silver market became more frequent. Maguire decided to inform the CFTC. He contacted commissioner Bart Chilton
Bart Chilton
Bart Chilton is a commissioner on the United States Commodity Futures Trading Commission . Chilton has been a vocal supporter of position limits in commodities markets...
, who had Eliud Ramirez, a senior investigator from the CFTC's enforcement division, get in touch with Maguire. Maguire explained the manipulations in great detail, both over the phone in an hour-long interview and afterward, in a series of e-mails with screen shots.
Maguire then predicted a manipulative event in the silver market and gave detailed information in an e-mail to the CFTC about what to expect, sending it on February 3, 2010, two days prior to the event. The event transpired exactly as Maguire predicted. While the event was taking place, Maguire sent e-mails in real time, pointing out certain details because the CFTC enforcement seemed not to know what to look for or how to interpret the data.
Hit and run
Maguire and his wife were injured in London in a hit-and-run accident on March 26, 2010, the day after Maguire's name came to light during a CFTC hearing on limiting gold and silver positions held by large market participants in order to prevent manipulation. Maguire believes the accident was an attempt on his life. The driver of the other vehicle was apprehended after a police chase, both on the ground and from the air in helicopters, but his name has not been released. Maguire said, "We got hit in the side at full acceleration and tried to corral the cars in a gas station, including the guy who hit us with a commercial vehicle." The assailant then sped away, hitting at least two more cars. Maguire said the police told him the assailant was known to them, but he has been unable to get further information about the case. The assailant was reportedly given a slap on the wrist.Ongoing criminal investigation
The United States Department of JusticeUnited States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
's Antitrust Division and the CFTC are conducting civil and criminal probes steming from a New York Post
New York Post
The New York Post is the 13th-oldest newspaper published in the United States and is generally acknowledged as the oldest to have been published continuously as a daily, although – as is the case with most other papers – its publication has been periodically interrupted by labor actions...
article concerning Maguire's allegations. Following publication of the article, JPMorgan released a statement that they are not under investigation by the Department of Justice or the CFTC. The CFTC has interviewed 32 people and reviewed 40,000 documents, but as of May 2011, no action has been taken. On February 24, 2011, in less than an hour, the price of silver fell $1.50 per ounce before recovering. Another London-based trader, Richard Guthrie, wrote to Chilton to complain about the event, asking “How many investors lost money and positions to the financial benefit of an elite few?” Chilton believes violations of the law have taken place and wants to see prosecutions move forward, but the five-member commission has yet to act.
See also
- Regulatory captureRegulatory captureIn economics, regulatory capture occurs when a state regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can act as...
- Inside JobInside Job (film)Inside Job is a 2010 documentary film about the late-2000s financial crisis directed by Charles H. Ferguson. The film is described by Ferguson as being about "the systemic corruption of the United States by the financial services industry and the consequences of that systemic corruption." In five...
– Academy Award-winning documentary about "the systemic corruptionSystemic corruptionSystemic corruption is corruption which is primarily due to a weaknesses of an organisation or process.It can be contrasted with individual officials or agents who act corruptly within the system....
of the United States by the financial services industry and the consequences of that systemic corruption" - List of whistleblowers