Silver Subject to Price Manipulation, Chilton Says

By Asjylyn Loder and Pham-Duy Nguyen - Oct 26, 2010 6:17 PM GMT 
As an investigation of the silver market by the top U.S. commodity regulator entered a third year, a member of the Commodity Futures Trading Commission said today there have been “repeated attempts” to influence prices. 

“There have been fraudulent efforts to persuade and deviously control that price,” said Commissioner Bart Chilton at a hearing today in Washington, alleging there have been violations of the Commodity Exchange Act. “Any such violation of the law in this regard should be prosecuted,” he said.
The five-member commission began investigating allegations of price manipulation in the silver futures market in September 2008. The CFTC said in a report that year that it had received “numerous letters, e-mails and phone calls” during the last 20 to 25 years alleging prices were being manipulated downward.
The CFTC proposed today new rules against manipulation and disruptive trading practices. Proving manipulation has challenged courts and lawmakers since the early attempts to regulate U.S. commodity markets in the 1920s.
“I don’t believe there is any long-term conspiracy to control prices,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “Manipulation can occur in small doses for very short periods of time. Adding regulation may not do the trick of correcting the problems simply because the players are smarter than the regulators and they’ll find another way to game the system.”
Silver’s Gain
Silver, used to create the first telegraph messages, has almost doubled gold’s gain this year, beating global equities, Treasuries and most industrial metals. Silver holdings through exchange-traded products surged this year. The metal is used in jewelry and industrial applications such as solar panels.

http://www.bloomberg.com/news/2010-10-26/silver-market-faced-fraudulent-efforts-to-control-price-chilton-says.html