‘3, 2, 1, Boom’: Silver-Fixing Allegations in a Dozen Chats

A cache of documents from Deutsche Bank AG include what a group of silver investors claim is a “smoking gun”: private electronic chats showing traders from numerous banks conspiring to rig prices from 2007 to 2013, according to a court filing in New York last week.

The bank provided the documents to the investors after settling a lawsuit accusing it of rigging markets in precious-metals. As part of the accord in April, the bank paid $38 million and turned over more than 350,000 pages of documents and 75 audio tapes. The investors now want to use the chats to win permission from a judge to file a new complaint against other banks.

The traders aren’t named in the chats now in court filings; instead, they are identified by their bank, such as UBS Trader A. The chats have not been edited for spelling or grammar: In Chats, Silver ‘Mafia’ Traders Flexed Muscle, Drew Blades

UBS and Deutsche Bank silver traders agreed to follow the “11 o’clock” rule where they would short silver at 11 a.m., timing their trades with a countdown sequence, according to court papers. From a Feb. 8, 2011 chat:

“Here we go here we go,” wrote a Deutsche Bank trader.

A UBS trader: “gogogogogoggog.”

“Dude...near the high,” the Deutsche trader responded. “Im gonna ramp it...that my plan...u?”

“If 53 breaks imam go guns blazing,” the UBS trader wrote.

“Yeah...exactly...as in on the break of 53..it’s the 3 2 1 boom.”

UBS Group AG said last week it will “vigorously” fight the new allegations in court papers.

Bend Silver

On Oct. 15, 2010, a UBS trader wrote, “Gonna bend this silver lower.”

A Deutsche Bank trader responded, “Oh dear. my boss just said he bought some.”

The UBS trader said, “I have to be sneaky then.”

Then later, “Had to really work that one. told u I’d bend it lower for u.”

Recruit Others

On June 8, 2011, a UBS trader wrote about the need to recruit others to their network of silver riggers, according to the new court documents.

“Im gonna sell a lil more we need to grow our mafia a lil get a third position involved,” the UBS trader wrote.

A Deutsche Bank trader responded, “OK calling barx” (Barclays; a bank representative declined to comment).

‘One Team’

“You are short right...haha...we are one team one dream,” a Barclays trader wrote on April 6, 2011.

A Deutsche Bank trader responded, “Of course short. Short 1 lac.”

“Nice,” the Barclays trader said.

Stop-Loss

Traders at UBS conspired with Deutsche Bank so often to trigger stop-loss orders that they referred to themselves as “Stop Busters,” according to the court filing.

“And if you have stops...oh boy,” the UBS trader wrote on June 8, 2011.

The Deutsche Bank trader responded, “HAHA...who ya gonna call!...STOP BUSTERS...deh deh deh deh dehdehdeh deh deh deh deh dehdehdeh.”

‘We’ll Sell’

On Aug. 22, 2007, a Deutsche Bank trader-submitter wrote to an unnamed acquaintance at Fortis Bank, “Seems some buying pre sil fix in the systems.”

The Fortis banker responded, “We’ll sell 70’s together.”

“At this rate mate we can sell 11.80’s both mkts are as thin as Ive ever seen them in my 5 years,” the Deutsche Bank trader-submitter said. “Ill be a light seller on the fix so watch your screen.”

Fortis was purchased in 2009 by BNP Paribas SA, which declined to comment.

Influence Market

A UBS trader admitted his bank’s ability to influence the silver market in a Aug. 11, 2011, chat with a Deutsche Bank trader.

“If you want to accelerate it...go short 20k silver,” the UBS trader wrote. “Stay on the offer in 1s...doesn’t require much ammo.”

“Ack,” the Deutsche Bank trader responded.

“Avalanche can be triggered by a pebble if u get the timing right,” the UBS trader wrote.

‘Do It Together’

On April 1, 2011, a UBS trader commented on plans to manipulate silver transactions with Deutsche Bank, according to the court filing. “If we are correct and do it together, we screw other people hard,” the trader wrote.

‘Slight Adjustment’

In an Aug. 5, 2011, chat, a UBS trader wrote, “Bro lets make a slight adjustment to our plan today.”

A Deutsche Bank trader responded, “K.”

The UBS trader then wrote, “Depending on where the mark is we go short around 11-11:30 am I makesure to let u know if I do something.”

“Ok Im definitely going short lol,” the Deutsche Bank trader said.

“Lol revenge huh? That’s what’s driving u,” the UBS trader responded.

“It is but I dun care.”

Join Chat

In a Feb. 9, 2011 chat, traders from UBS and Deutsche Bank decide to invite traders from HSBC and Barclays to join the chat, in addition to others, according to the filing. After those individuals were added, the UBS trader wrote, “Wow this is going to be the mother of all chats.”

Remain Patient

On May 11, 2011, a UBS trader urged a trader at Deutsche Bank to remain patient.

“Cooooooooooooome on!!!!!! I got faith I got two hours for this to push up faith bro this is like a trading church me and u have,” the UBS trader wrote.

“Hahah dude,” the Deutsche Bank trader responded.

“Hallelujah,” the UBS trader said.

The Deutsche Bank trader then said, “I wanna ramp it up like really just buy at mmkt and fk everyone so bad.”

“Stick to game plan 2 lots @ 20/25 30 patience,” the UBS trader said.

‘Stays Here’

Several chats express the need for secrecy, according to the filing. On June 8, 2011, for instance, a UBS trader wrote, “Okay rule of thumb. EVERYTHING here stays here.”

A Deutsche Bank trader responded, “Yeah.”

“So no need to repeat in the future,” the UBS trader wrote.

“Saves us typing lol,” the Deutsche Bank trader responded.

“Cause we just so paranoid” the UBS trader said.