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Silvercorp Sues Jon R. Carnes, His EOS Holdings and Zane Heilig as "Alfred Little"/"IFRA" in Silvercorp Amended New York Lawsuit

admin — Mon, 09 Jan 2012 21:00:00 +0000

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Jan. 9, 2012) - Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX:SVM)(NYSE:SVM) today filed an amended lawsuit in the Supreme Court of the State of New York, County of New York, adding EOS Holdings LLC., Jon Carnes, Zane Heilig, Andrew Wong and International Financial Research & Analysis Group (“IFRA”), as defendants. The original claim, filed on September 22, 2011 alleges that defendants Chinastockwatch.com, Jerry Katz, Alfredlittle.com, Alfred Little, Simon Moore, and several “John Doe” defendants with spreading “false, defamatory and fraudulent” information about Silvercorp on the Internet and in letters to the media and regulators to drive down the price of Silvercorp’s stock to profit from their short positions in the stock. The defendants have not yet answered the Silvercorp’s suit and the allegations remain to be proved.

Silvercorp has conducted extensive investigations to support the allegations concerning the involvement of the various parties who have been added as defendants:

1. Jon R. Carnes is a member of the group comprising Defendant Alfred Little. Carnes is a United States citizen who maintains resident addresses both in Las Vegas, Nevada and in the Vancouver, British Columbia area. Carnes is the President of Defendant EOS Holdings LLC (“EOS”), which he founded in 1992, and he is an official (with the title “Protector”) of One Horizon Foundation, which is the largest shareholder of EOS.

2. Zane Heilig is a member of the group comprising Defendant Alfred Little. Heilig is a United States citizen who maintains resident addresses both in Las Vegas, Nevada and in the Vancouver, British Columbia area. Heilig is the Director of Research at EOS, and has worked for Carnes for many years.

3. EOS Holdings LLC is a member of the group comprising Defendant Alfred Little. EOS Holdings LLC., a Nevada corporation, describes itself as a fund that focuses on “identifying and funding first and second round investments in small and mid sized companies in the U.S., Canada and China,” and that has “completed over 25 investments to date.” EOS’ website represents that it maintains a team of five full-time agents and numerous part-time agents in China based in its Chengdu office.

Carnes, Heilig and EOS are alleged to have become participants in the group comprising Alfred Little well before the September 2011 attacks on Silvercorp and other companies with operations in China. On March 29, 2011, Carnes, Heilig, IFRA, and EOS were involved in the publication of a press release in the name of “Alfred Little” relating to another company called China Integrated Energy through the PR Newswire service. PR Newswire’s records show that the 72 year old mother of EOS’s Research Director Zane Heilig “authorized” the “Alfred Little” release, and gave as contact phone numbers for the release the Vancouver phone number of defendants Heilig, Carnes, and EOS. Heilig’s mother also gave PR Newswire, as an additional contact phone number, the Hong Kong phone number of the added defendants Andrew Wong and IFRA. Furthermore, Heilig’s mother hand-wrote the check to pay PR Newswire for running the “Alfred Little” release using funds forwarded by Zane Heilig.

Andrew Wong and IFRA are members of the group comprising defendant Alfred Little. Andrew Wong is a Senior Analyst at IFRA, which describes itself as a “provider of complex financial analysis, business research, and investigative due diligence services.” IFRA maintains offices in the United States and China, including at the following locations: (i) 10/F Miramar Tower, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong; (ii) 548 Market Street, San Francisco CA 94104; and (iii) 2280 East Ventura Boulevard, Camarillo CA 93010, as well as a contact phone number in New York County (area code 646).

A Shanghai-based analyst with IFRA named “Dino” Huang admitted in an interview with the Globe and Mail, that IFRA had prepared the “Alfred Little” report attacking Silvercorp on which this law suit is based. The IFRA analyst further admitted that IFRA prepared the report on behalf of an “unnamed hedge fund” that had shorted Silvercorp stock, and thus would profit if the stock price dropped.

In two separate anonymous affidavits recently filed on behalf of “Alfred Little” in New York Court in the Sino Clean and Deer litigation against “Alfred Little” arising from similar short-and-distort stock manipulations, “Alfred Little” swore under oath that he has “used” IFRA to carry out his activities. (“Alfred Little” swore to the affidavits before a notary at the U.S. Consulate in Shanghai, but then redacted his name and signature before submitting the affidavits to the Court.)

Information obtained from EOS’ website further indicates that the person responsible for “overseeing all of the fund’s activities” is Kun Huang, who is described as its “Asia Region Manager” and its “Chief Investment Analyst”. Mr. Huang is a Canadian citizen with a residence in Vancouver, British Columbia. Other senior EOS officials include Jeff Huang (a/k/a Xiaofu Huang), its Director of Investment Investigation; Beth Liu, Vice President; Xiping Wang, Vice President; Joseph Ramelli, Manager of Equity Trading; Biquiang Huang, Vice President managing its Chengdu office, and Li (Emma) Liu, Director China. On information and belief EOS controls and acts through One Horizon Foundation, EOS Research LLC, EOS Asia Investments Limited, Carnes Investment Foundation, and JCAR Funds Ltd., among other entities and individuals.

EOS maintains offices in the United States, Canada and China, including at the following locations: (i) 2560 Highvale Drive, Las Vegas, NV 89134; (ii) 1500 West Georgia Street, Suite 1400, Vancouver, British Columbia V6G 2Z6, Canada; (iii) 3740 Chatham Street, Suite 205, Richmond, British Columbia V7E 2Z3, Canada; (iv) Level 18, The Office Tower, Shangri-La Centre, 9 Binjiang Road (East), Chengdu, Sichuan, China 610021; and (v) 689 Guang Dong Lu, Huang Pu Qu, Shanghai, China 200001, as well as locations in Beijing and Hong Kong.

Silvercorp has alleged that, beginning on August 29, 2011 and continuing up to the present, defendants have posted on the chinastockwatch.com and alfredlittle.com websites and sent anonymous letters to the British Columbia Securities Commission, the Ontario Securities Commission, Silvercorp’s auditors at Ernst & Young, and various financial media outlets that falsely and maliciously allege that Silvercorp’s financial statements and its resource deposits were overstated, among other false and defamatory statements. Following these statements, Silvercorp’s stock price dropped sharply – as much as 20% in a day on unusually high trading volumes – before partially recovering as Silvercorp came forward with information in the form of bank statements, government records and other documents to rebut the defendants’ false allegations.

Silvercorp has sued the defendants for defamation, unjust enrichment, trade libel and tortious interference, and deceptive acts and practices. As a result of the conduct charged, Silvercorp has asked the court to order the defendants to pay compensatory and punitive monetary damages, to order that the defendants’ profits from their short selling activities should be disgorged to Silvercorp or imposed with a constructive trust and paid as the court may direct, and to order the defendants to remove false statements about Silvercorp from their websites and not to repeat such misconduct, among other relief.

As previously reported, Silvercorp has reported on the facts as they are understood to law enforcement authorities in Canada, the United States, and China and is cooperating with the investigations in those countries. Silvercorp is represented in this matter by the law firm of K & L Gates LLP.

About Silvercorp Metals Inc.

Silvercorp Metals Inc. is engaged in the acquisition, exploration, development and mining of high-grade silver-related mineral properties in China and Canada. Silvercorp is the largest primary silver producer in China through the operation of the four silver-lead-zinc mines at the Ying Mining District in the Henan Province of China. Silvercorp recently acquired the XBG and XHP silver-gold-lead-zinc mines nearby the Ying Mining District in Henan Province, further consolidating the region. Silvercorp has commenced production at its second production foothold in China, the BYP gold-lead-zinc project in Hunan Province, and is currently constructing the mill and related facilities in preparation for mining at the GC silver-lead-zinc project in Guangdong Province. In Canada, Silvercorp is preparing an application for a Small Mine Permit for the Silvertip high grade silver-lead-zinc mine project in northern British Columbia to provide a further platform for growth and geographic diversification. The Company’s shares are traded on the New York Stock Exchange (symbol: SVM) and Toronto Stock Exchange (symbol: SVM) and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.

The politics of gold investment

admin — Wed, 02 Nov 2011 16:00:00 +0000

I think I know some lab mice that have received less examination than the 2012 Republican primary candidates. It seems with each passing cycle, the campaigning starts earlier, there are more debates, and the media frenzy gets more intense. Yet, with all the pyrotechnics and pageantry, it becomes difficult to figure out what these tricksters actually think when they’re behind the curtain. Since the gold price is inextricably linked to the long-term fate of the US dollar, it’s rather important for gold investors to be able to forecast how each candidate, if elected, would conduct his/her monetary policy.

Monetary policy is not nearly discussed enough in debates or television appearances – partly because too few viewers care about it, and partly because most candidates simply don’t understand the subject. The most common monetary policy platform amounts to little more than, “I’m opposed to China’s currency manipulation, and America needs a strong dollar!” (Little do they know that these two goals are right now in opposition.)

As we examine three frontrunners, it’s important to remember that their future policies can be difficult to distil, but that their past records are likely to be a more effective indicator than their present rhetoric.

HERMAN CAIN: THE FED CHAIRMAN

Cain’s lucky he’s known as “The Guy Who Makes Pizza” instead of “The Guy Who Prints Money.”

Herman Cain was Chairman of the Federal Reserve Bank of Kansas City from ‘95 – ‘96, and held the positions of Deputy Chairman and Board Member during the preceding six years. This was the heyday of Alan Greenspan’s bubble economy, and there is little record of Cain dissenting. While some have remarked that Cain knew little about economics when he joined the board, he has had ample time to learn. Yet, when challenged to name his favorite Fed Chairman at this year’s debates, Cain still chose Greenspan!

Cain’s flagship “9-9-9 Tax Plan” is drawing headlines, but it contains no in-depth discussion of monetary policy, other than brief allusions to a “strong dollar.” No mention of quantitative easing or the money supply. No condemnation of artificially-low interest rates.

Even if Cain were able to reduce taxes considerably, the spending would continue. Like many Republicans, Cain talks generally about spending cuts, but does not specifically target any budget items. We can assume any actual cuts he gets through Congress would be of the “slow the growth of future spending” variety.

With continued spending and record of inflation tolerance, Cain will most likely turn to the Fed to monetize the extra debt. This means a Cain presidency is likely to be very bullish for gold – with the mitigating factor that if given free reign, Cain might at least try to move the country back on a sustainable path.

Cain Presidency:

Bullish for gold
Bearish for USD

MITT ROMNEY: THE CLOSET DEMOCRAT

Consider the following quote: “My experience tells me that we were on the precipice, and we could have had a complete meltdown of our entire financial system, wiping out all the savings of the American people. So action had to be taken.”

It sounds like Tim Geithner, Ben Bernanke, or Paul Krugman. President Obama himself has said exactly the same thing countless times. Yet, this quote comes from Mitt Romney at a recent Republican debate.

Romney supported the TARP bailouts. Romney defends the Federal Reserve. Romney even implemented socialized medicine as Governor of Massachusetts. He says he would conduct monetary and fiscal policy “differently” than Obama, but when you’re car is headed over a cliff, it doesn’t much matter whether you drive on the right or left side of the road!

Just as with Cain, Romney still does not understand the terrible precedent set by the bailouts, and the devastating consequences loose monetary policy has on the US dollar and global economy. Worse yet, Romney hasn’t even offered a credible plan to reduce government involvement in the economy. Romney’s campaign slogan might as well be, “A New Face for the Status Quo.” And the status quo is a collapsing dollar and skyrocketing gold.

Romney Presidency:

Very bullish for gold
Very bearish for USD

RON PAUL: THE GOLD STANDARD

If Ron Paul were elected President, he would immediately move to cut spending drastically. This is clear based on his 35-year record of acting on his promises, and his recent campaign pledge to cut $1 trillion from his first proposed budget. He would face stiff resistance from both parties, for sure, but such a move would change the entire direction of public discourse.

Now, it’s important to remember that $1 trillion is only two-thirds of the 2011 deficit. So, even if President Paul got his entire budget approved, we still would be facing a growing debt of around $16 trillion at that point. While President Paul could order the Treasury to begin selling its toxic assets that are impeding economic recovery, he wouldn’t have direct control over the Fed – which, under Bernanke, would likely announce even more money-printing to counteract the President’s tough medicine.

But President Paul’s real silver bullet would come two years into his term when he would get the opportunity to nominate a new Fed Chairman. As someone who entered public life in response to the end of the gold standard under Nixon, Paul is certain to appoint the most hawkish Fed Chairman the country has ever seen. This would immediately reverse the misfortunes of the US dollar and could impact gold’s rise.

But remember, even in this pie-in-the-sky scenario, it will still take years for Bernanke’s devaluation damage to fully circulate around the global economy. That means gold could still appreciate well into a Paul presidency.

Ultimately, a Paul presidency could also lead toward a gold standard monetary system. In such a case, gold is likely to carry an even higher value as the premium for serving as the international reserve asset.

Paul Presidency:

Bullish for gold
Bullish for USD

RICK PERRY: THE BIG SPENDER

Rick Perry is a career politician now in his 11^th year as Governor of Texas. He claims to be a tax-fighter, but he has signed several tax increases as Governor. To the extent that he has held the line on taxes, he’s overseen a more than doubling of Texas state debt. And not all of this money was going to pay for schools and roads. For instance, he created the $435 million Texas Enterprise Fund to subsidize politically connected businesses.

As a candidate, Perry has adopted Ron Paul’s rhetoric being critical of the Fed’s quantitative easing programs. He’s even gone as far as accusing Bernanke of “treason.” But he doesn’t show a deep understanding of what makes the Fed’s policies so destructive, and his campaign website makes no mention of monetary policy at all.

Still, Perry at least knows which way the wind is blowing, and he does have a record of vetoing expensive legislation. Overall, it’s hard to tell what kind of President he would be – a lot like it was for the last Texas Governor that become President. In the latter case, President George W. Bush claimed to be for small government and a humble foreign policy, but went the exact opposite way once elected.

Perry might make an attempt to change Washington’s direction, but he has neither the depth nor the steadfastness to really make it happen. Thus, the current gold/dollar dynamic would be likely to continue

Perry Presidency:

Bullish for gold
Bearish for USD

NEWT GINGRICH: THE BENEDICT ARNOLD

In the mid-’90s, Newt Gingrich gained a reputation as a radical reformer after he led the Republicans to their first House majority in 40 years. He wrote a Contract with America, and made a good faith attempt to pass all of its provisions. This movement could be credited with stopping Hillarycare, enacting welfare reform, and reducing certain key taxes.

But in the years since, he has vocally supported programs like the costly Medicare Part D, teamed up with Hillary Clinton on healthcare, and supported mainstream Republican candidates over Tea Party challengers.

What happened? Clearly, Gingrich has been building bridges in order to be seen as a moderate candidate for his Presidential run.

If only he had kept to his original firebrand style, he might have had a shot at getting something done in the White House. Unfortunately, trying to become part of the establishment is a game with no end, and therefore Gingrich is likely to continue “reaching across the aisle” to author costly legislation. If he announces a Contract with Austerity, maybe I’ll change my tune.

Gingrich Presidency:

Bullish for gold
Very bearish for USD

HOW IMPORTANT IS THE PRESIDENT?

Despite what the media would have you believe, the President is not all-powerful. In fact, a President only has limited powers compared to Congress. Without the support of Congress and the American People, a President can be rendered a lame duck early on – like Jimmy Carter was.

The direction of gold under most candidates is fairly easy to predict – it will continue appreciating against the falling US dollar. This is simply because these candidates will not even attempt to address the disastrous fiscal and monetary policies that have brought us to this point.

The price direction under Ron Paul (and also Gary Johnson), however, would be less predictable. I believe both men would try their best to reverse the US decline that my strategy is insulating against.

In any case, even an authentic campaigner who understood the calamities of money-printing would be hard-pressed to actually save the dollar at this point. The history of fiat currencies has few – if any – examples of monetary debasement being reversed before the currency falls apart – and many cases of gold proving the superior asset.

BARACK OBAMA: THE WORST-CASE SCENARIO

There is one candidate in 2012 that we can be sure won’t even try to save the dollar, and that is President Obama. From his doubling down on the bailouts to his faithful support of Chairman Bernanke, Obama has done almost everything in a President’s power to hasten the dollar’s demise.

If he is re-elected, which still seems like a possibility, then you better put on your mining hats because the gold rush is on!

Peter Schiff is CEO of Euro Pacific Precious Metals, a gold and silver dealer selling reputable, well-known bullion coins and bars at competitive prices. To learn more, please visit www.europacmetals.com or call (888) GOLD-160.

For the latest gold market news and analysis, sign up for Peter Schiff’s Gold Report, a monthly newsletter featuring original contributions from Peter Schiff, Casey Research, and the Aden Sisters. Click here to learn more.

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The politics of gold investment

Royal Canadian Mint now selling receipts for initial $250 million gold bars in Ottawa vault

admin — Fri, 28 Oct 2011 20:30:00 +0000

OTTAWA, Oct. 28, 2011 /CNW/ – The Royal Canadian Mint is pleased to announce its initial public offering of Exchange Traded Receipts (ETRs) under the Mint’s new Canadian Gold Reserves program. Each ETR provides evidence of ownership in physical gold bullion held in the custody of the Mint at its facilities in Ottawa, Ontario. The Canadian Gold Reserves program marks the expansion of the Mint’s successful core bullion and refinery business.

“We believe that this new program will build on our reputation and continued success as a world-class custodian of precious metals,” said Ian E. Bennett, President and CEO of the Royal Canadian Mint. “With the introduction of the Canadian Gold Reserves ETR program we hope that investors will see this as a convenient, efficient and secure method for investing in and owning physical gold.”

Unlike other gold investment products, the purchaser of an ETR owns the actual gold rather than a unit or share in an entity that owns the gold. The net proceeds of the offering will be used to purchase gold on behalf of the initial purchasers of ETRs at the London pm fix price on the closing date of the offering (Closing Date). Subject to certain restrictions, ETR holders will be entitled to redeem their ETRs for physical gold products in the form of 99.99 per cent pure gold bars or coins, or for cash based on the future gold price or market price of the ETRs.

Subject to market conditions, the initial offering of ETRs is targeting an issue size of approximately CAD$250 million. The issue price per ETR will be CAD$20.00 or the USD equivalent and the Per ETR Entitlement to Gold will be determined on the Closing Date and will be reduced daily by an annual service fee of 0.35 per cent.

Subject to the satisfaction of certain conditions, the ETRs will be listed on the Toronto Stock Exchange and commence trading on the Closing Date. ETRs will be listed in both Canadian and U.S. dollars and may be traded in either currency.

Through a competitive process, the Mint has selected a syndicate of investment dealers led by TD Securities Inc. and National Bank Financial Inc., and including BMO Nesbitt Burns Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., Cormark Securities Inc., MGI Securities Inc. and Raymond James Ltd. to distribute the ETRs on a best efforts agency basis.

Closing is expected to occur in late November 2011. The offering is being made on a prospectus-exempt basis pursuant to the terms of an order of the Ontario Securities Commission dated August 30, 2011.

The ETRs have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States. This media release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Note: An investment in the ETRs involves a degree of risk. These risks result primarily from fluctuations in the price of gold. A detailed description of these risks and other important information about the ETRs and the Canadian Gold Reserves ETR program is contained in the Information Statement. A prospective investor in ETRs should review and carefully consider the risks described in the Information Statement, a copy of which may be obtained in reasonable quantities by contacting TD Securities Inc., Attn: Symcor, NPM (Email: sdcconfirms@td.com, Tel: (289) 360-2009).. ETR holders will have no recourse to the Mint or the Government of Canada for any loss on their investment.

About the Royal Canadian Mint
The Royal Canadian Mint is the Crown Corporation responsible for the minting and distribution of Canada’s circulation coins. An ISO 9001-2008 certified company, the Mint is recognized as one of the largest and most versatile mints in the world, offering a wide range of specialized, high quality coinage products and related services on an international scale. For more information on the Mint, its products and services, visit www.mint.ca.

Sabotage, deadly clashes shut down Grasberg

admin — Mon, 17 Oct 2011 17:41:00 +0000

China’s state news agency reports all production at Freeport McMoran’s Grasberg mine in a remote province of Indonesia has been halted after a pipeline was sabotaged, access to the pit and underground operations were blocked and three miners were killed in an ambush.

The latest attack follows an incident last week when Indonesian security forces fired on striking workers after a protest turned violent, killing one and injuring a dozen other, including seven police, some of them critically. The local police chief said between 500 – 600 policemen are now billeted at the mine.

Some 12,000 Workers at Grasberg began a strike on 15 September and earlier this month vowed to shut down the mine if hourly wages of $1.50 is not upped 8-fold.

Xinhua reports “As of today we had to stop all production process,” Freeport Vice President Nurhadi Sabirin said in a teleconference with the media held here.

Sabirin said that the pipeline transferring gold and copper ores from its mill to the seaport cannot operate properly following the shootings and sabotage. The pipeline stretches 114 km from Freeport’s mill center on Grassberg hill in Tembagapura, Papua to the seaport.

As of Oct. 15, Freeport has shipped 103,189 tons of gold and copper concentrate from its seaport in Papua.

Al-Jazeera has in-depth coverage on Grasberg: Freeport began to disclose security-related payments in filings with the US Securities and Exchange Commission in 2001. It confirmed annual payments reaching an average $5m each year for government-provided security of the Grasberg complex and its staff and fluctuating annual costs reaching $12m for unarmed, in-house security costs. A spokesman for the company later told the Jakarta Post that these payments had been taking place since the 1970s.

Reuters reports Freeport-McMoRan Copper & Gold Inc (NYSE:FCX) is the largest taxpayer in Indonesia and in the first week of the strike last month when production was slashed by 230,000 tonnes a day, it represented daily losses of $6.7 million in government revenue. Freeport, the world’s largest publicly traded copper miner, is also facing labour action at its Corro Verde mine in Peru.
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Sabotage, deadly clashes shut down Grasberg

Politicians, financial regulators, banking officials and gold

admin — Tue, 11 Oct 2011 13:10:00 +0000

Over the last few years we have seen some amazing developments occur in the global financial sector none of which are good or encouraging. The sovereign debt debacle in the Eurozone threatens the very existence of the euro as well as many banks. And, it is no news that the US is technically bankrupt. But, what amazes me more than anything else is the action taken by so called financial regulators, politicians and leading banking officials around the world.

With regard to the recent sell-off in gold, I am absolutely certain that there is a great deal of truth to the commentaries that suggest that this sell-off was engineered by central banks and their agents the bullion banks, in an attempt to thwart the upward momentum in gold and thus take the spotlight away from gold.

In a blatant attempt to drive the price of gold down, some large sell orders came onto the futures market during the time when the market was least liquid. You have to ask the question, why would anyone sell at the most illiquid times? The seller was obviously determined to move the market in the direction they wanted and was not interested in the least in attempting to liquidate at the best possible price. Then, as the prices of equities, commodities and most currencies plunged, it appears that certain hedge funds that were taking a beating in their stock positions used the profits made in gold and silver to cover those losses. This added to the downward momentum. The cherry on the top of the cake was the action taken by the CME. They hiked the margin for gold by 21% and in a falling market! Yet, while the S&P plummeted, the CME reduced margins for this contract by 33%! And, interestingly, although the price of gold tumbled, very few buy orders for physical gold were actually filled at the lower prices.

When it comes to precious metals especially gold and silver I find the actions of the CME very questionable. While they may proclaim their actions are taken to prevent market volatility, when it comes to gold and silver their actions actually cause much of the volatility. And, since it seems that their actions always favour the short position, I wonder what understanding they have with the bullion banks who have constantly attempted to suppress prices.

In the meantime those banks who have purchased high yielding government debt are now squealing that they don’t want to take their losses. Slightly more than a year ago, these banks purchased high-yielding Greek government bonds and then touted them to their clients as one incredible investment opportunity. All they were looking at was the high yield. The risk involved which was clearly obvious at the time was completely overlooked. And, now as the bonds become worthless, those banks don’t want to lose money. Can you imagine if you told you stock broker that you were not prepared to take the loss on the shares you bought a year ago?

In recent years, the amount of bank fraud going on, particularly in the USA, is unbelievable. Well-known banks are being sued for securities fraud, mortgage backed securities fraud, insider dealing, lying to clients… the list of claims is endless.

In June of 2007, Morgan Stanley agreed to pay $4.4 million to settle a class-action lawsuit with brokerage clients who bought precious metals and paid storage fees, when in fact it was alleged that Morgan Stanley wasn’t physically storing their gold and silver at all.

Last April, the Securities and Exchange Commission (SEC) targeted Goldman Sachs in a civil fraud case. The lawsuit alleged Goldman sold investors a synthetic collateralized debt obligation (CDO) linked to the performance of certain mortgages without disclosing that John Paulson’s hedge fund, Paulson & Co., helped design the CDO (named Abacus) and was shorting it. As mortgage prices collapsed, the buyers of Abacus – including ACA Financial and German bank IKB – lost nearly $1 billion.

On July 15, 2010, Goldman settled with the SEC for $500 million. The bank neither admitted nor denied the allegations. It said the marketing materials for Abacus contained “incomplete” information.

JP Morgan Chase was fined $228 million for a bid-rigging scheme involving municipal bonds. The Chase ruling is the latest to come down in a series of fines involving a number of banks, including Bank of America and UBS. This scam that Chase, Bank of America and UBS were involved with was no different in any way, really, from old-school mafia-style bid-rigging scams.

What these banks did is they got together and carved up territory between them, arranging things so that they wouldn’t be bidding against each other in municipal debt auctions. That means the 18 different states involved in these 93-odd deals all got screwed out of the best prices, leaving the taxpayers in those places severely overcharged for their public borrowing.

A few months ago, the Federal Reserve slapped an $85 million fine on Wells Fargo & Co for allegedly steering borrowers into high-cost subprime mortgage loans even though they qualified for safer loans. The fine is the largest civil monetary penalty the Fed has ever assessed in a consumer-protection enforcement action, the central bank said.

Only last week, Harry Markopolis the man who brought down Bernie Madoff’s $65 billion Ponzi scheme, told King World News that, “Bank of New York is going to go down, Eric. Between Bank of New York Mellon and State Street, these two institutions have stolen between $6 to $10 billion from tens of millions of Americans retirement savings accounts. It’s been a hell of a crime spree for the bank, but now they are being brought to justice.” Markopolos has led the team that spearheaded this investigation from the beginning. Harry and his team were the first to expose this fraud. Markopolos also told KWN, “The New York Attorney General filed suit on Tuesday (against Bank of New York Mellon) for stealing money from pension funds on currency transactions. This theft has been from tens of millions of Americans, policemen, firemen, librarians, municipal workers, judges and the list goes on and on and they’ve been doing it for decades.

Banks all around the world were coerced by US regulators into introducing the most meaningless, stupid and irritating law in banking history. Suddenly, clients old and new were regarded as terrorists, money launderers, arms and drug dealers unless of course they could prove their whereabouts! Overnight banks around the world wanted copies of documents relating to your physical address, identity documents and a history of all your financial dealings going back a few life-times. Of course, the authorities claimed that these new laws were necessary to prevent the flows of funds to terrorist organisations. However, there is a very big difference between the individual who happened to have a few thousand dollars in cash and someone else walking into the bank with suitcases of cash. Yet, despite the obvious difference the little guy who merely wanted to deposit a few thousand dollars in cash was instantly flagged. But, if you agreed to sign a string of documents admitting that the money actually belonged to you and nobody else, then the bank called off the raid by the local SWAT team. This act has done nothing but violate every single persons right to privacy.

When this law was introduced in South Africa under the name Financial Intelligence Centre Act of 2001 (FICA) people who had houses, and cars financed with a bank suddenly had to identify themselves??? The mere fact that they were known to the bank for years was beside the point. There is not one piece of intelligence in this law and enough is enough. By judging at what is happening with the banking system and as far as I am concerned it should be the client asking questions about the bank and not the bank asking questions about the client. If the global monetary system collapses, you can be assured of one thing. Any money you had deposited in a bank will be wiped out and you won’t have any recourse.

This law also gave the US government an excuse to attempt to destroy what was and still is the most efficient and honest banking system I have ever come across. I refer to what is known as offshore banking. My message is simple. Don’t accept whatever you hear and see on the media. Politicians are corrupt and financial leaders and bankers have lied to us. Take steps to protect your own wealth. The two important things that anyone can do is to first own some gold and silver bullion. And the second is to have an offshore bank account. Every single person that has some money deposited in a financial institution should allocate a portion of this money to gold and silver bullion and store it far away from any bank.

Silvercorp escapes silver meltdown after finding someone to sue

admin — Fri, 23 Sep 2011 19:16:00 +0000

After a three-week hunt Canada’s Silvercorp Metals on Friday found the alleged short-sellers behind an effort to drive down the company’s stock price. The company is suing two New York-based websites – Chinastockwatch.com and Alfredlittle.com – for spreading false information.

While Silvercorp was trading down 1.4% in early afternoon trade losses among silver heavyweights were much deeper with bellwether Silver Wheaton skidding 11% as the precious metal plummeted 17.7% to barely above $30/oz. Silvercorp is up 0.6% over the last two trading days against the S&P TSX index which has bled 7%. It was the worst trading day for silver in decades.

Silvercorp Metals (TSE:SVM) was trading down 1.4% at $6.95 in early afternoon trade giving it a market value of $1.2 billion. Silver Wheaton (TSE:SLW) lost a massive 10.9% and is now worth $11.5 billion trading at $32.48.

Silvercorp is seeking punitive damages of at least $10 million and compensatory damages of more than $1 million. Silvercorp’s complaint in the case notes that during August 2011, market data began to reveal a potential short selling manipulation scheme. The number of Silvercorp shares out on loan, jumped dramatically from 3% of total shares outstanding at the beginning of August to almost 14% at the end of the month, representing approximately 23 million shares.

Silvercorp Files Lawsuit in New York Against Stock Manipulation Scheme

BMO launches gold deposit program that makes it simple for Canadians to purchase and hold physical gold bullion

admin — Thu, 22 Sep 2011 13:08:00 +0000

TORONTO, ONTARIO — (Marketwire) — 09/22/11 — Editors Note: There is a photo associated with this press release.

BMO Financial Group is making it simple for Canadians to purchase and hold physical gold bullion. With the launch of BMO’s Gold Deposit Program, clients will be able to purchase physical gold using a delivery and custody process that is simple, efficient and cost effective. Physical allocated gold deposits are not new to Canada but easy access for clients has always been a challenge. BMO is offering this unique program exclusively through BMO Nesbitt Burns Investment Advisors, or through in-branch Resident Investment Advisors.

The BMO Gold Deposit Program allows Canadians to purchase gold and either have it delivered to their front door, or held in a custodial account operated by BMO Nesbitt Burns at an approved third party storage facility.

“We created this program to serve the needs of clients,” said Simon Carling, Managing Director, BMO Capital Markets. “In these volatile times, having the ability to access and hold physical gold on deposit through BMO Nesbitt Burns’ custody account is an option investors may find appealing. Our program is designed to provide system-wide, secure and easy access.”

The gold can be purchased from any of BMO Nesbitt Burns’ 1,350 investment advisors. Purchases are denominated in Canadian dollars and feature daily liquidity and physical withdrawal and delivery options. There are also no annual storage fees, no annual MER and the minimum purchase is one ounce. Withdrawal and delivery fees may apply.

“All of the gold in the deposit program is fully allocated and physical, which means that it is segregated and title to the gold is unencumbered and secure for the account holders. So clients actually do ‘hold the gold’,” added Mr. Carling. “The program will not use financial gold certificates that are subject to an institution’s credit worthiness, unallocated gold, derivatives, exchange traded products, gold stocks, or other gold securities. If purchasers are looking for a simple and efficient way to buy and hold physical gold on deposit in Canada, I think this is it.”

To learn more, customers should contact their BMO Nesbitt Burns Investment Advisor and obtain a copy of the Disclosure Statement and Terms and Conditions for the Program. Neither Bank of Montreal, BMO Nesbitt Burns or any of their respective affiliates provide any guarantee as to the value of gold under this Program. The gold under this Program will not constitute deposits that are insured under the Canada Deposit Insurance Corporation Act or any other deposit insurance regime.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $477 billion as at July 31, 2011, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

About BMO Nesbitt Burns

Backed by the experience, stability and resources of BMO Financial Group, BMO Nesbitt Burns is a full-service investment firm with an extensive network of approximately 1,350 Investment Advisors at 76 branches across Canada. The origins of BMO Nesbitt Burns’ predecessor firms date back to 1912. In 1987, BMO Bank of Montreal acquired Nesbitt Thomson, then one of Canada’s oldest and most respected investment houses. In 1994, BMO Bank of Montreal also acquired Burns Fry, one of the largest dealers of Canadian equities and debt securities. Nesbitt Thomson and Burns Fry then merged to become BMO Nesbitt Burns.

To view the photo associated with this press release, please visit the following link: http://www.marketwire.com/library/20110920-Simon%20Carling.jpg.

Contacts:
Media Contacts:
Beja Rodeck, Toronto
(416) 867-4924
beja.rodeck@bmo.com

Martha McInnis, Toronto
(416) 867-4914
martha.mcinnis@bmo.com

Sarah Bensadoun, Montreal
(514) 877-8224
sarah.bensadoun@bmo.com

Laurie Grant, Vancouver
(604) 665-7596
laurie.grant@bmo.com

It’s the media, stupid!

admin — Tue, 06 Sep 2011 16:20:00 +0000

I´m taking a contrarian position on this recession we’re supposedly heading into.

Why? Well, for starters I’m always suspicious when I see the media trying to create news. It happens every August, a notoriously slow month. The major outlets have been out in force, beating the bushes for bears willing to comment, rather apocalyptically I might add, on tepid job growth figures reported by the U.S. Labor Department. Private hiring, which excludes government agencies, only climbed 17,000 last month, the smallest increase since a decline in February 2010.

Well, whoop ti doo and lah di dah!

What, August is some kind of bellwether month for hiring now? I wouldn´t know because I´m always at the cottage along with nine tenths of the world’s population during that time of year.

Sorry if I haven’t taken to hoarding food and ammo in the basement on this kind of news.

The other big story I have trouble with is that slowth, or slow growth, in the U.S. and Europe is going to send the rest of the world into recession.

Gosh, we sure are important aren’t we?

Friends of this newsletter know that I’m bullish on mining, and South America, in that order.

You’ve heard of South America no doubt. Every banker and broker in Europe and North America has a map of it in their office. It’s represented by the grey, amorphous land mass below the Rio Grande, and usually with the old sailors´warning Here be Dragons scrawled crudely over it in felt pen.

The more absorbed we become in the problems on Wall Street and in Brussels, the more likely we are to forget about South America altogether. But I can assure you it most decidely exists, and GDP growth – or rather lack of it – is not a problem here. On the contrary, growth has been on a tear in the past five years and created a whole other set of problems.

Nowhere is this more apparent than Colombia, a former drug empire which everyone seems disposed towards liking nowadays. I’m not sure what the reason is for all this Colombia-philia, but I suspect it may have something to do with the notoriety of Pablo Escobar and the cartels. Oddly, every millionaire I know suddenly wants to own his own hotel in Medellin. I suppose they’re all armchair kingpins.

Be that as it may, I for one am not too keen on Colombia as a destination for exploration capital these days.

I should explain…

I live in Medellin, where my sideline is providing language training services to the minerals and oil & gas industries. My wife, a Colombian national, happens to be the daughter of a former mayor out in El Choco, a Pacific facing ‘departamento’ which has extremely good gold geology but high political risk. For the past year or so he’s been singing the praises of that region, and quietly handing me tantalising details of this or that property, mostly moose pasture but some of it with past producing assets or present artesanial workings.

Now my pop in law thinks El Choco is a better bet for mineral speculation than neighbouring Antiochia, where the capital city of Medellin is located. ”And you know,” he whispers conspiratorally, ”that the mining department in Antiochia brings gold in from El Choco and counts it among their inventory”.

This is a spin on claim jumping which strikes me as not only a heck of a lot safer but even quasi legal. Use your neighbour’s gold to boost your own production and win government approval and foreign investment capital.

Of course I had to consider the source. This initially sounded to me like jealousy, and I may have ignored it altogether had I not received a strange phone call from the Ministry of Mines and Energy three years ago.

At that time, I was told by a reliable source in the ministry that a proposal was being drafted for the creation of a subindex on Canada’s Toronto Stock Exchange (TSX) listing only Colombian gold miners. I’m not sure what the fate of that proposal was, or even if was drafted, but I suppose it would have just echoed down the hall if and when it got to Bay Street. Still, it shows just how proactive and aggressive the gold mining states of Colombia are prepared to be.

This bit of trivia illustrates two things: First, that the industry at the present time is extremely under-regulated, and second, that there is unprecedented government interest in the sector as an engine for regional economic development.

All of which in turn means that legislation is pending which will more closely regulate the mining industry across the country.

And that has to be bad news for somebody.

That was the concensus reached by the majority of government and industry players last week at the 7th International Colombian Mining Show in Bogota, which I attended. Legislation is currently some ways off, but it’s in the mail, and in the meantime regional governments and grass roots mining groups, one claiming to represent some 2 million private operators across the country, are lobbying like mad.

As an aside, it’s curious to me that this number is virtually the same as what I’ve seen quoted in other countries, notably Ecuador and even Nicaragua. Do you suppose the same ‘artesanial’ miners just kind of flit from country to country just before new mining legislation is about to be written?

That suspicion notwithstanding, there is real reason for foreign mining companies and investors to fear such legislation. But to understand the risks here, the investor must know a few basic facts about Colombia.

The 40 some odd year civil war has displaced a lot of peasant farmers. In other words, they´ve been run off their land by the FARC, by the paramilitaries, by common drug dealers, and even by interested local politicians. So the disenfranchised drift to the cities, where they try to eke out a living as unskilled labourers Naturally, that creates a lot of poverty and urban sprawl.

The government has tried to restore some of those farmer owners, chiefly by setting up local tribunals and regional councils, but somebody always shoots them. The lastest round of murders occured as recently as last May, though it was not widely reported.

Meantime, the outlaw elements out there in the countryside continue to fund their operations with — you guessed it! — low level, artesanial mining. The government does not want to issue mining permits to these people or their proxies, but also recognizes that mining is a prime engine for economic growth out there where it counts.

And then there are the local communities, like those in Santander who nixed Greystar’s multimillion ounce Angostura gold project due to concerns over the region’s watershed.

So the pressure is building for government to develop some kind of cohesive vision for the industry in the coming months. Expect a new, legislative framework for the permitting process, probably some kind of small business program, perhaps even a quota system, the creation of ‘no mine’ areas where the environment is a concern, and probably some guarantees for large scale projects to keep the transnationals pumping investment capital into the country.

Any gold junior with a vested interest, as well as their shareholders, has a right to be concerned. At the same time, I believe there will be new opportunities, and perhaps even a windfall or two, for investors who patiently wait for the other shoe to drop.
Read more here:
It’s the media, stupid!

Mining giant backs new Australian International Arbitration Rules

admin — Wed, 31 Aug 2011 12:06:00 +0000

SYDNEY, Aug. 31, 2011 /PRNewswire/ — Vice President of Litigation BHP Billiton, Mr Damian Lovellhas today welcomed the introduction of the new ACICA Arbitration Rules designed to speed up the resolution of cross border and international commercial disputes.

Mr Lovell, who is responsible for the dispute resolution strategy for the world’s largest diversified mining company, said it is standard practice for BHP Billiton to include arbitration clauses in its cross border contracts:

“We see international arbitration as an integral part of our global dispute resolution strategy. We commend ACICA’s initiative in producing these rules which is consistent with this strategy.”

In welcoming the endorsement by BHP Billiton, ACICA President and Clayton Utz Head of Major Projects and International Arbitration, Professor Doug Jones AM said servicing cross border dispute resolution is a global billion dollar business and with legislative, regulatory and procedural reforms in place, Australia is an attractive destination to resolve global business disputes:

“Australia is well placed to meet the growing demand for first-rate, cost-effective arbitration services especially in the Asia Pacific region.”

Following the Australian Government’s decision to appoint ACICA as the sole default appointing authority under the amended International Arbitration Act (1974), the ACICA Arbitration Rules have been updated after extensive consultation with eminent practitioners, policymakers, academics and business leaders. The Rules now include Emergency Arbitrator provisions – a first for an Australian arbitral body.

Chair of the ACICA Rules Committee, Malcolm Holmes QC said the provisions will provide greater flexibility including an option to seek emergency interim measures of protection from an emergency arbitrator before the arbitral tribunal is constituted:

“One of the concerns expressed by the international business community is that arbitration needs to provide means of granting protective measures. A party to a dispute may need to ensure that the other party refrains from taking certain actions before the dispute has been heard. For instance, one party may wish to prevent the other party from destroying evidence, or it may seek to ensure that the other party continues to perform its obligations under an ongoing contract.”

A major partner of the Australian International Disputes Centre (www.disputescentre.com.au) and a signatory to agreements with over 50 global arbitral bodies including the Permanent Court of Arbitration at The Hague, ACICA has also developed the Appointment of Arbitrators Rules 2011 which establish a streamlined process through which a party can apply to have an arbitrator appointed to a dispute seated in Australia.

A board comprising representatives of the Attorney-General of Australia, the Chief Justices of the High Court and Federal Court, the President of the Australian Bar Association, the President of the Law Council of Australia and industry representatives will oversee the appointment process.

ACICA will promote the new arbitration rules with a series of presentations next month to be held in global financial centres including Zurich, New York and Shanghai.

Contact: Gianna Totaro
ACICA Media Relations
+61 (0)438 337 328
gtotaro@acica.org.au

SOURCE Australian Centre for International Commercial Arbitration
Read more here:
Mining giant backs new Australian International Arbitration Rules

Video: Majestic Gold’s new China mill

admin — Tue, 23 Aug 2011 22:30:00 +0000

EKM visits Majestic Gold’s (MJS.V) new mill and gold mine near Yantai, China. Featuring interviews from the President of Majestic, Rod Husband, as well as director Rudy Brauer, this video takes you on the ground to see the operations first hand.

Majestic Gold Corp. is a Vancouver-based, TSX Venture Exchange and Frankfurt Exchange-listed gold exploration and development company with a very advanced gold deposit in Shandong province of China. On April 23, 2010, the company released an updated NI 43-101- compliant, indicated and inferred gold resource estimate on its Song Jiagou property. At present, Majestic Gold Corp. is aggressively pursuing a pre-feasibility study. A recently announced agreement will increase Majestic’s effective ownership from 54 to 94 % and has allowed the property to commence production at an initial rate of 1,400 tpd. With a contract that fixes operating costs and allows use of land and equipment, Majestic anticipates to have a positive cash flow, within a matter of months.

More videos are available at Even Keel Media