When the CFTC announced in September that it has closed its investigation into misconduct in the silver market, the predicable response was that a finding of no manipulation was to be expected as US regulators and government are corrupt and they had to protect JPM blah blah blah.
However a closer reading of the announcement indicates that the CFTC did not actually find there was no manipulation. They said that "based upon the law and evidence as they exist at this time" there was no "viable basis to bring an enforcement action". That wording can also be read as saying they have evidence but based on the law, they don't see any chance of success.
Certainly it was not for want of evidence, as this September 2009 statement by Bart Chilton noted that the silver investigation had "invested over 2,318 staff hours ... 32 individual interviews ... approximately 40,000 documents have been reviewed" and by November 2011 the number of documents was 100,000. At the end they had spent 7,000 staff hours on it.
As this Reuters article notes, US regulators face high hurdles in proving cases of market manipulation and while "the CFTC has levied heavy fines for trading rule violations ... only once in its 36-year history has it successfully concluded a manipulation prosecution: a 1998 case concerning electricity futures prices." I would also give as an example the lawsuits against JPM and HSBC for silver manipulation, which failed "to show that the bank 'intended to cause artificial prices to exist' and acted accordingly".
Proving manipulation is difficult give the complex rules and regulations the CFTC has to deal with. As I said in this blog post, "when regulations get this complex market fairness and transparency is actually harmed, and the only ones who benefit are those big enough to have lawyers able to work out the loopholes."
I do find it hard to believe that there was only one case of manipulation in 36 years across all the markets the CFTC monitors. Therefore I am was not be surprised that the CFTC closed its silver investigation, nor do I expect them to provide much help in this respect in the future.
PS, in the CFTC announcement there was this classic: "the complaints pointed to differences between prices in the silver futures contracts and prices in other silver products, including retail silver products. The complainants generally asserted that because the prices for retail silver products, such as coins and bullion, had increased, the price of silver futures contracts should have also experienced an increase." I fail to understand how people can think that the price (per ounce) of a 1oz coin should relate to the price (per ounce) of a 1000oz bar, when the 1oz coin's price (and rate of increase) is affected by the capacity limitations of minting 1000oz bars into coins (see these Shortage posts for more background).