Author: Mark A. Cymrot

Publisher: Twelve Tables Press

ISBN: 978-1-946074-19-5

Mark A. Cymrot is a first-chair attorney with the prestigious law firm of BakerHostetler that handles complex, international commercial arbitration and litigation.

In a New York courtroom in 1988 Cymrot representing Minpeco S.A, a mineral company owned by the Peruvian Government, brought a $150 million lawsuit against the wealthy Texas Hunt brothers and their co-conspirators two Saudi Arabian sheiks - Ali bin-Mussallam and Mohammad Aboud al-Amoudi -as well as Mahmoud Fustok, a Saudi businessman; Naji Nahas, a Lebanese citizen who lives in Brazil, and the International Metals Investment Company, a Bermuda partnership. They were accused of engaging in 1978 and 1979 in an elaborate conspiracy wherein they illegally manipulated silver prices causing considerable financial damage to Minpeco. Cymrot's Squeezing Silver: Peru's Trial Against Nelson Bunker Hunt is a blow-by-blow account of the actual tedious court proceedings.

As mentioned in the book, Minpeco was one of the many investors caught on the wrong side of the wealth transfer when in ten days it lost $80 million as silver future prices surged early in 1979. It could no longer pay its margin calls when its chief lender, Peru's national bank, ran out of money, “a stark display of the impoverished of the country as it transferred its limited capital to oil billionaires.

The Hunt brothers defence was that in the 1970s together with others believed that with inflation and due to other economic events silver would become a haven in the same way as gold. The attorneys for the Hunt brothers brought up the fact that in 1979 there was the seizure of the US Embassy in Iran, the evacuation of Americans from 10 Muslim countries and the incursion into Afghanistan by the Russians all of which caused the prices of precious metals to rise. In addition, they contended that Minpeco's losses were caused by an inexperienced official, Ismael Fonseca, who supervised the company's investments in futures contracts and that the company was thus trying to lay the blame on the Hunt brothers for the fact that prices of silver rose during the later part of 1979 and early 1980. Moreover, even if a conspiracy were to be proven, Minpeco would not be able to show that it had been injured as a result because the company had held substantial positions in precious metals. In fact, the company would have benefited handsomely from the rise in silver prices. Still, if we assume Minpeco lost money on its future trading, it would nevertheless have to prove that the price increase that caused it to lose money on its future contracts was more than it made on its silver sales and commissions. The defence furthered their assertion that Minpeco's claim for damages is all speculation. In addition, they pointed out that the commodity regulators had changed the rules in the “middle of the game” and halted the Hunt brothers' accumulation of silver, breaking the price spiral.

Many believe that this debacle was the prequel of what we experienced several years later with the bankruptcy of the brokerage house Lehman Brothers that triggered the worst recession since the Great Depression.

Although this book would be of particular interest to attorneys, law students, investors in commodities, and generally anyone interested in civil court proceedings, I doubt very much if the ordinary layman would have the patience to read through four hundred and twenty-four pages of trial and cross-trial examinations of the Hunt brothers and others. Cymrot does mention in his Prologue that Bunker and his fellow perpetrators were never criminally prosecuted because one regulator told him that the case was too complicated. Frankly, I am surprised as to how the jury was able to decipher all of the facts in this complex case?