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Hunts Drove Up Silver Prices, Jury Told

February 25, 1988|From Reuters

NEW YORK — Blasting the legendary Hunt brothers as "power-hungry" and "unscrupulous," an attorney for Peru's leading mineral company accused them Wednesday of conspiring with Saudi Arabian tycoons to fix silver prices in 1979 and 1980.

"They cheated, they drove up prices of silver, and they did it intentionally," said Mark Cymrot, a lawyer for Peru's Minpeco SA.

He was making opening remarks in a class-action lawsuit by Minpeco against the Hunts, the Texas brothers whose fortunes have since soured. The case is being heard before a federal jury in Manhattan.

The suit alleges that the Hunts broke federal antitrust laws by scheming to fix silver prices and to monopolize the silver market. Minpeco, which hopes to recover about $150 million lost in the Hunts' alleged bid to corner the silver market, is believed to be the biggest casualty of the scheme.

The Hunts are also facing a separate complaint from the Commodity Futures Trading Commission in Washington.

The CFTC is charging that between September, 1979, and March, 1980, the Hunts and their far-flung associates hoarded more than 100 million ounces of silver bullion and drove prices sky high.

During that period, silver soared from less than $11 an ounce to a record $50.35 before crashing on March 27, 1980, to $10.80 an ounce. The Hunts lost an estimated $1.3 billion in the collapse.

Cymrot said the brothers are expected to claim that it was political events that drove up the price of silver and that they made their purchases for legitimate business reasons.

But CFTC said the Hunts' purchases between September, 1979, and May, 1980, were equivalent to 130% of the silver consumed by the entire U.S. silver industry in 1979.

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