Minpeco, S.A. v. Conticommodity Services, Inc.

In this action arising out of the crisis in the silver market in 1979-1980, Minpeco alleges that, under the leadership of Bunker and Herbert Hunt, a number of silver futures traders and the brokerage houses who handled their silver futures accounts participated in a conspiracy to manipulate upward the price of silver and silver futures. Five defendants have moved for summary judgment on the ground that the evidence of record is insufficient to establish their participation in this conspiracy. Moving defendants are ACLI International Commodity Services, Inc. (“ACS"), Prudential-Bache Securities, Inc. (“Bache”), and Merrill Lynch, Pierce, Fenner & Smith, Inc. (“Merrill Lynch”), brokerage houses who provided services to the alleged trading conspirators, 1 and Mahmoud Fustok and Lamar Hunt, who were individual silver traders. Although these well-briefed and argued motions present difficult and close questions, I conclude that the record contains sufficient evidence from which a reasonable jury could find that these five defendants participated in a conspiracy to manipulate silver prices. The jury, aided by the live testimony of witnesses subject to cross-examination, must decide whether the moving defendants participated in the conspiracy alleged. Accordingly, the motions for summary judgment are denied.

The gravamen of Minpeco’s claims is that a conspiracy led by Bunker and Herbert Hunt, supported by two groups of wealthy investors, including Lamar Hunt and Fustok, and knowingly assisted by the defendant brokerage firms, caused the dramatic rise in silver prices from August 1979 to January 1980. The goal of the alleged conspiracy was to manipulate upward the price of silver and silver futures contracts. Minpeco alleges that defendants’ conspiratorial activity violated 1) §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2; 2) § 9(b) of the Commodity Exchange Act, 7 U.S.C. § 13(b); 3) the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-65; and 4) N.Y.Gen.Bus.Law § 340 and New York common law. 2

According to Minpeco, there were two so-called “groups” of trading conspirators: the Hunt Group and the Conti Group. The key members of the Hunt group were the three Hunt brothers and the International Metals Investment Company (“IMIC”), a Bermudian corporation established in July 1979 and controlled by Herbert and Bunker Hunt and several Arab investors. The Conti Group consisted of a coalition of Swiss and Arab bankers and traders, including Naji Nahas, moving defendant Fustok, and Advicorp Advisory Financial Services S.A. (“Advicorp”), who traded in large part through ACS and through Norton Waltuch, a trader with ContiCommodity Services, Inc. (“Conti”). The trading defendants’ role in the alleged conspiracy was to create the appearance of new investor demand in silver and to buy as much of the certificated silver bullion in the Com- *687 modify Exchange, Inc. (“Comex”) and Chicago Board of Trade (“CBT”) warehouses as possible by taking delivery on silver futures contracts.

The broker defendants are alleged to have known about the conspiracy both through objective market conditions indicating that the silver market was being manipulated, and through the direct knowledge of their employees from working with and observing the Hunt and Conti groups. Minpeco claims that, motivated by the opportunity to profit from increased trading and higher prices in silver and by the desire to curry favor with the Hunts, the broker defendants joined the conspiracy by assisting the Hunt and Conti groups in three major ways: 1) allowing manipulative trading; 2) financing the conspiracy; and 3) deceiving the exchanges and the Commodity Futures Trading Commission (“CFTC”).

The moving defendants do not dispute that they were significantly involved in silver trading in 1979-1980, nor, of course, do they dispute the dramatic rise and fall of silver prices. They argue, however, that the only evidence garnered by Minpeco after years of massive discovery is at least as consistent with legitimate, independent action as with participation in a conspiracy. Hence, they contend that the conspiracy claims must be dismissed as to them as a matter of law. 3

Discussion

Three recent Supreme Court decisions— Matsushita Electric Industrial Co. v. Zenith Radio Corporation, 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and Celotex Corporation v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) — and a recent opinion of the Court of Appeals for this circuit, Apex Oil Co. v. DiMauro, 822 F.2d 246 (2d Cir.1987), articulate the standards to be applied in motions for summary judgment under Fed.R.Civ.P. 56.

The Supreme Court has stressed that to establish a “genuine issue for trial” on a motion for summary judgment, the non-moving party must show more than “some metaphysical doubt as to the material facts,” Matsushita, 106 S.Ct. at 1356. The Matsushita court made clear that “[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party there is no ‘genuine issue for trial.’ ” Accord, Anderson, 106 S.Ct. at 2511 (threshold inquiry is whether “there are any genuine issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party”).

However, while Matsushita and Anderson stand for the proposition that the trial court must carefully scrutinize the record to determine whether genuine issues for trial exist, the Supreme Court has also reaffirmed that:

Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict. The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor. Neither do we suggest that the trial courts should act other than with caution in granting summary judgment or that the trial court may not deny summary judgment in a case where there is reason to believe that the better course would be to proceed to a full trial.

Anderson, 106 S.Ct. at 2513-14 (citations omitted); accord Apex, 822 F.2d at 253 (“question of what weight should be assigned to competing permissible inferences remains within the province of the fact-finder at trial”).

*688 To establish that the moving defendants participated in the antitrust conspiracy alleged, Minpeco must present direct or circumstantial evidence that reasonably tends to prove that the defendants had a conscious commitment to a common scheme to achieve an unlawful objective. See Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 1470, 79 L.Ed.2d 775 (1984); Apex, 822 F.2d at 252. In determining whether a plaintiff has produced sufficient evidence to prove such a commitment, Matsushita and Apex clarify that “antitrust law limits the range of permissible inferences from ambiguous evidence in a § 1 [Sherman Act] case.” Matsushita, 106 S.Ct. at 1357; accord, Apex, 822 F.2d at 252.

First, “conduct as consistent with permissible conduct as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy.” Matsushita, 106 S.Ct. at 1357; accord, Apex, 822 F.2d at 252. There must be evidence in the record that “tends to exclude” the possibility that the alleged conspirators were acting independently, rendering the inference of conspiracy reasonable in light of the competing inferences of independent action. Matsushita, 106 S.Ct. at 1357; Apex, 822 F.2d at 252. Hence, evidence of defendants’ parallel conduct is, by itself, insufficient: a plaintiff “must show the existence of additional circumstances, often referred to as ‘plus’ factors, which, when viewed in conjunction with the parallel acts, can serve to allow a fact-finder to infer a conspiracy.” Apex, 822 F.2d at 253. These “plus” factors include: a common motive to conspire, a high level of “interfirm” communications, and evidence that the parallel acts were “against the apparent individual economic self-interest of the alleged conspirators.” Id. at 254. However, evidence of parallel conduct is not irrelevant because:

[a] court deciding whether to grant summary judgment should not view each piece of evidence in a vacuum. Seemingly innocent or ambiguous behavior can give rise to a reasonable inference of conspiracy in light of the background in which the behavior takes place.

Id. at 254-55.

Second, the economic plausibility of the plaintiff’s claims is relevant to a determination whether genuine issues exist for trial: if the claim is one that “simply makes no economic sense,” the plaintiff must come forward with more persuasive evidence to support its claim than would otherwise be necessary. Matsushita, 106 S.Ct. at 1356. Furthermore, in the antitrust context:

[l]ack of motive bears on the range of permissible conclusions that might be drawn from ambiguous evidence: if [defendants] had no rational economic motive to conspire, and if their conduct is consistent with other, equally plausible explanations, the conduct does not give rise to an inference of conspiracy.

Id. at 1361.

With these principles in mind, each defendant’s motion is discussed briefly below. At the outset, however, several general comments are in order which apply equally to the five motions. First, it is clear from the record that there are genuine issues for trial as to the existence of the core conspiracy to raise silver prices which Minpeco has alleged: Minpeco has produced evidence of parallel conduct, a high level of communications, and a common motive to conspire at least as to defendants Bunker and Herbert Hunt, IMIC and Nahas. In fact, the moving parties do not argue that Minpeco’s conspiracy claims should be dismissed altogether. Instead, each moving defendant argues simply that there is insufficient evidence to establish his — or its — participation in the alleged conspiracy. This distinction is relevant because in Apex, the Court of Appeals, after finding that there were genuine issues of fact as to one defendant’s participation, noted that “‘once a conspiracy is shown, only slight evidence is needed to link another defendant with it.’ ” Apex, 822 F.2d at 258 (quoting United States v. Wilkinson, 754 F.2d 1427, 1436 (2d Cir.), cert. denied, 472 U.S. 1019, 105 S.Ct. 3482, 87 L.Ed.2d 617 (1985)). However, this precept does *689 not relieve Minpeco of its burden to demonstrate genuine issues for trial as to each of the five moving defendants. Indeed, the Apex court, after finding sufficient evidence of participation in the alleged conspiracy as to one defendant, affirmed the granting of summary judgment as to all the other defendants because it could not “find such a link” as to any of the other defendants. Id. at 258.

Second, the Apex court distinguished between conspiracies which concern “long-term complex relationships among competitors,” where the conspiracy is more susceptible to direct proof, and cases “where the alleged scheme is simple in operation” and “as a practical matter ... the best proof available most often will only tend to show the existence of an informal, perhaps even tacit, rather than explicit, agreement.” Apex, 822 F.2d at 253. The moving defendants here argue that because long-term complex relationships are involved in this case, it is more like Matsushita than Apex, and the lack of direct proof as to their participation in the conspiracy is significant. However, the scope of the conspiracy alleged here falls between those described in Matsushita and Apex: it is alleged to have lasted longer than the onetime squeeze pictured in Apex, but not as long as the twenty-year cartel among competitors in Matsushita. Furthermore, at its core the conspiracy alleged here, like that in Apex, is relatively simple: the defendants are said to have worked together to raise silver prices by cornering the supply of silver. Hence, while the lack of direct evidence makes plaintiffs case harder to prove, it does not render the conspiracy portrayed implausible per se.

Finally, Apex reaffirms that all reasonable inferences must be drawn in favor of Minpeco, viewing the evidence as a whole. See Apex, 822 F.2d at 252-53. This case— like Apex — turns on the competing inferences that may reasonably be drawn from largely undisputed facts. Once it is concluded that the record supports a reasonable inference that each moving defendant participated in the alleged conspiracy, it is for the jury to choose between Minpeco’s version of events and that of the defendants.

I. The Broker Defendants

The brokers’ motions for summary judgment present substantial questions, particularly whether Minpeco has produced sufficient evidence of the brokers’ knowing participation in the conspiracy.

First, in the face of unqualified denials of participation and knowledge by high-ranking executives from the three brokerages, Minpeco must establish that each brokerage house had actual knowledge of the essential nature and general scope of the conspiracy alleged. Minpeco need not prove, however, that each broker knew the exact limits of the alleged scheme or the identity of all the participants. See United States v. Barnes, 604 F.2d 121, 154-55 (2d Cir.1979), cert. denied, 446 U.S. 907, 100 S.Ct. 1388, 64 L.Ed.2d 260 (1980); Rich-Taubman Associates v. Stamford Restaurant Operating Co., 587 F.Supp. 875, 879 n. 5 (S.D.N.Y.1984). Nor can a defendant evade liability for participation in a conspiracy by consciously avoiding knowledge of a scheme’s unlawful aims and objectives. See United States v. Lanza, 790 F.2d 1015, 1022 (2d Cir.1987), cert. denied, — U.S. -, 107 S.Ct. 211, 93 L.Ed.2d 141 (1986).

Second, there must be evidence of record showing knowledge on the part of the brokers’ employees which can be imputed to the corporation itself. The brokers may be bound by the acts and declarations of a managerial employee acting within the scope of his authority. See United States v. Koppers Co., 652 F.2d 290, 298 (2d Cir.), cert. denied, 454 U.S. 1083, 102 S.Ct. 639, 70 L.Ed.2d 617 (1981).

Third, Minpeco argues that the broker defendants must have known about the conspiracy because of their knowledge of market conditions. According to Minpeco’s theory, objective economic indicators such as the allegedly unusual pattern of silver spreads, silver price volatility, and non-proportionality of silver with gold prices must have alerted market professionals to the manipulation of the silver futures market. The brokers respond that plaintiffs’ analy *690 sis of market conditions is flawed and, at most, an exercise in hindsight.

The extent to which objective indicators demonstrated manipulation is significant to Minpeco’s core claim that manipulation did in fact occur and provides relevant background to Minpeco’s claim that the brokers were aware of the conspiracy. See Apex, 822 F.2d at 254-55 (evidence on summary judgment not to be viewed in a vacuum). However, generalized knowledge on the part of the brokers that the silver market was receiving artificial stimuli is insufficient, alone, to demonstrate a conscious commitment to join and further the specific conspiracy charged.

A. ACLI Internal Commodity Services, Inc.

It is not disputed that during the 1979-1980 period, at least twelve entities and individuals with some connection to Advicorp, the largest of which were BPS and Litardex, traded silver futures contracts through commodity trading accounts at ACLI Commodity Services, S.A. (“ACS Geneva”), ACS’ Geneva branch, as did Herbert and Bunker Hunt. In addition, ACLI International, Inc., ACS’ parent company, loaned Herbert and Bunker Hunt as much as $135 million in the period from October 1979 to March 1980, collateralized by silver.

ACS argues, however, that scrutiny of the evidence of record can only lead to the reasonable conclusion that ACS had no knowledge of any conspiracy between the Advicorp and the Hunt groups and that it only provided its Advicorp-related clients and the Hunts with legitimate financial services motivated by sound business reasons. Certainly ACS’ explanation of its activities is a possible interpretation of the facts. Plaintiffs, however, as indicated below, have provided sufficient evidence from which a reasonable jury could reach a differing conclusion: that ACS knew its Advi-corp clients and Hunt clients were engaged in a collective manipulation of the silver and silver futures market, and that ACS knowingly joined the conspiracy by various acts, most importantly by shielding the conspirators’ activities from the CFTC and Co-mex. It is for the jury to choose which of these competing reasonable conclusions to draw. See Apex, 822 F.2d at 252.

1) Knowledge of the Conspiracy

Minpeco has presented sufficient evidence from which a jury could reasonably conclude that ACS knew that the Conti group and the Hunt group were collectively engaged in manipulative trading. First, it could be reasonably concluded, based on the testimony on letters rogatory of Jean-Francois St. Severin, an account executive at ACS Geneva in 1979, combined with statements in the affidavits submitted by higher-level ACS officials, that for at least a significant period of the conspiracy ACS knew that Advicorp was related to and had some control over the twelve accounts opened at ACS’ Geneva branch in 1979-1980, and that Nahas was also related to these Geneva accounts. It could also be inferred that ACS knew that the Conti group was acting together with the Hunt group, based on evidence of Bunker Hunt’s presence at a meeting between Nahas, Selim Nassif, and ACS officials to discuss problems with the Advicorp accounts, coupled with evidence of knowledge that Advi-corp was placing trades for the Hunts.

Second, a jury could reasonably conclude that ACS knew that at least some of the holders of the Advicorp-related accounts at ACS Geneva were engaged in manipulative trading. In addition to the alleged changes in BPS’ silver trading pattern — such as increased deliveries and trading in congested months — which Minpeco argues displayed the classic indicia of manipulative trading and which ACS argues were consistent with normal, legal behavior, there is also evidence that ACS knew that BPS was resisting Comex’s efforts to regulate the silver futures market by encouraging traders to reduce their long silver positions in congested months.

2) Acts in Furtherance of the Conspiracy

Minpeco alleges that ACS engaged in three types of actions in furtherance of the conspiracy: 1) ACS permitted its Advicorp- *691 related accounts to engage in manipulative trading; 2) ACS knowingly loaned money to the Hunts to finance the conspiracy’s manipulative activities; and 3) ACS deceived the CFTC and Comex to shield the conspirators from adverse regulation. The cumulative weight of this evidence is sufficient to permit a juror reasonably to infer that ACS knowingly engaged in acts which furthered the alleged conspiracy.

First, the evidence of record permits a reasonable inference that ACS allowed the Advicorp-related accounts to engage in manipulative trading activity and that ACS knowingly financed the conspiracy through loans to the Hunts. The types of trading and financial services which ACS provided to the Advicorp-related accounts were routine and legal and can not, without more, give rise to an inference of participation in a conspiracy. Evidence of record, however, suggests that by allowing its Advicorp-re-lated accounts to take large positions in silver, in combination with the extension of loans collateralized by silver, ACS exposed itself to potential liability far exceeding its net worth. This over-extension could permit an inference that ACS was acting against its economic interest, one of the “plus” factors which tends to exclude the possibility of independent legitimate behavior. See Apex, 822 F.2d at 254. Furthermore, there are genuine issues as to whether BPS’ and Litardex’ large-scale trading in December 1979 silver violated an ACS internal policy of limiting its customers to no more than 10% of the open interest in a particular month, further excluding the possibility of independent behavior.

ACS also argues that its termination of BPS’ account at the end of November 1979 contradicts Minpeco’s conspiracy claim. Clearly this termination could be viewed as inconsistent with the charge that ACS was assisting the conspiracy. But the evidence as to the circumstances of this termination, which apparently was sparked by a dispute over the terms for a delivery of December silver, including evidence that ACS attempted to obtain for BPS the financing necessary for the account to remain at ACS, is also subject to the conflicting reasonable interpretation that in fact ACS did everything possible to try to keep BPS’ account.

ACS’ trading and financial assistance to the Advicorp-related accounts and the Hunts might, in isolation, be viewed as equally consistent with legitimate, independent business activity as with participation in the conspiracy, and hence insufficient under Matsushita and Apex to allow a reasonable inference in support of Minpe-co’s claims. However, Minpeco has also produced evidence which could be interpreted as establishing that ACS, despite ample notice of its obligation to assist Comex in regulating the silver futures market, intentionally withheld from Comex pertinent information about the Advicorp-related accounts. This evidence, again, is subject to conflicting interpretations. But, drawing justifiable inferences in favor of the non-moving party, see Anderson, 106 S.Ct. at 2513-14, it does tend to exclude the possibility of legitimate business activity. See Apex, 822 F.2d at 254.

First, on November 8, 1979, Lee H. Berendt, then president of Comex, wrote to Henry Maringer, then ACS’ president and chief operating officer, to express his concern that BPS was not voluntarily reducing its positions in December 1979 silver, raising concerns “about the willingness of ACLI and/or its customer to cooperate with Comex....” 4 Berendt also advised that further reductions should be accomplished by liquidating or switching into maturities not earlier than May 1980 and particularly requested ACS’ cooperation in avoiding potential congestion in March 1980 silver on Comex. On November 12, 1979, Maringer responded that ACS had repeatedly informed BPS of Comex’s requests, and “urged our customer to comply [but that] ... we have thus far been unable to prevail upon our customer to do so,” and expressed surprise at Comex’s “apparent confusion between the actions of ACLI and *692 the actions of its customers.” 5 Yet, in a November 9, 1979 file memorandum describing ACS’ communications with BPS about its trading, Maringer does not mention having advised BPS to avoid maturities earlier than May 1980 and in fact refers to an agreement between ACS and BPS “that we would go up to 4000 lots total position, however, any new positions would be for March delivery onward.” 6 In fact, BPS continued to increase its positions at ACS in December 1979 and March 1980 silver until November 27, 1979, just a few days before the BPS account at ACS was closed. This evidence, while not the “smoking gun” which Minpeco labels it, supports the conclusion that ACS was shielding BPS from the Comex investigation.

Second, there are genuine issues for trial as to whether Maringer, when testifying at a November 1979 Comex deposition on the subject pf the Advicorp-related accounts, knowingly misrepresented the extent to which the ACS Geneva accounts under investigation were related by failing to tell Comex that six new Advicorp-related accounts had recently been opened at ACS Geneva.

It is only fair to note that Maringer has emphatically denied any intention to deceive Comex, and that ACS has produced evidence that after the November deposition, ACS did in fact provide Comex with information concerning the new Geneva accounts. However, it is for the jury, with the invaluable aid of Maringer’s testimony on the stand, to decide whether his denials should be accepted and how to resolve the apparently conflicting evidence. See Apex, 822 F.2d at 256.

3) Motivation

The most significant motive for ACS’ alleged participation in the conspiracy is the stake of its parent, ACLI, Inc., in the price of silver. ACLI, Inc. traded silver futures contracts and physical silver. The record shows that ACLI, Inc.’s silver positions were largely hedged, rendering the bulk of its silver holdings impervious to shifts in price, but it is also undisputed that ACLI, Inc. was “net at risk,” holding net unhedged long silver positions. Although these net unhedged positions were not large, they demonstrate that to an extent ACLI, Inc. was enriched by the rise in silver prices. Of course, as a broker, ACS also had a motive to preserve an orderly and healthy silver futures market, and the jury will have to weigh the significance of these competing motivations. However, Minpeco has established that this is not a case in which Minpeco’s claim as to ACS “simply makes no economic sense.” Matsushita, 106 S.Ct. at 1356.

B. Prudential-Bache Securities Inc.

In the early 1970s, Bunker and Herbert Hunt opened substantial silver futures trading accounts at Bache, and by October 1979, the Hunt accounts had the largest credit line at Bache. From October 1979 through March 1980, Bache approved loans to the Hunts collateralized by silver which eventually totalled approximately $233 million. Bache argues that provision of these normally legitimate trading and financial acts to Bunker and Herbert Hunt cannot support an inference that Bache knew about, let alone assisted, the multi-member conspiracy charged. However, as described below, Minpeco has presented evidence which raises genuine issues for trial, particularly as to Bache’s knowledge of the conspiracy through its employee Scott McFarland and as to Bache’s motive to participate in the alleged conspiracy.

1) Knowledge of the Conspiracy

Although only Bunker and Herbert Hunt had trading accounts at Bache, there is sufficient evidence to permit the conclusion that Bache knew not only of manipulative trading on the part of the Hunts but also knew that other traders were acting together with the Hunts.

In addition to the general evidence as to objective market indicators discussed *693 above, Minpeco has presented specific evidence from which it could be inferred that Bache knew of the Hunts’ manipulative intent. Minpeco’s evidence permits the inference that by October 1979 Bache knew that the Hunts’ position at Bache of 6,900 silver futures contracts was one-third of the Hunts’ over-all long silver futures positions. 7 This meant that the Hunts controlled 100,000,000 ounces of silver, close to 100% of the Comex and CBT warehouse stocks at that time. 8 Hence, Bache had information strongly suggesting that the Hunts were in the process of establishing a dominant position in the silver futures market, an important indicator of manipulative intent. See Cargill, Inc. v. Hardin, 452 F.2d 1154, 1164 (8th Cir.1971), cert. denied, 406 U.S. 932, 92 S.Ct. 1770, 32 L.Ed.2d 137 (1972). 9 Evidence of Bache’s knowledge of this trading behavior, coupled with evidence of other indicia of manipulative trading at Bache, and with Bache’s knowledge of Bunker and Herbert Hunt’s prior unusual, if not suspicious, silver trading behavior while at Bache, permits a reasonable inference that Bache knew of the Hunts’ manipulation.

Second, as to Bache’s knowledge of the scope of the conspiracy, the record indicates that in the mid-1970s, prior to Scott McFarland’s employment as an account executive at Bache, Bunker Hunt enlisted Scott McFarland to make contacts with Arab investors to whom Hunt could sell silver and persuade to buy silver. Evidence of record also allows the inference that McFarland knew at that time that the purpose of recruiting these new investors was to further Bunker Hunt’s plan to manipulate silver prices upward. McFarland’s knowledge of the scope and purpose of the conspiracy, because it was acquired when he was working as the Hunts’ broker for other brokerage houses, may not be imputed to Bache unless McFarland had this information in mind when he conducted silver transactions for the Hunts while he was employed at Bache. See Phelan v. Middle States Oil Corp., 210 F.2d 360, 365-66 (2d Cir.1954); see also Ferrara v. Scharf, 466 F.Supp. 125, 131 (S.D.N.Y.1979). However, the evidence of record permits this inference and presents an issue for the jury.

2) Acts in Furtherance of the Conspiracy

There is sufficient evidence of record to permit an inference that Bache knowingly participated in the conspiracy by allowing manipulative trading, providing the Hunts with financial assistance and by shielding them from the regulators. Two genuine issues for trial will be mentioned briefly.

From October 1979 to March 1980, Bache made three loans to the Hunts, totalling $233,000,000, collateralized by silver, and authorized a fourth loan which was never made. The timing of these loans, two of which were authorized just after Comex raised its margin requirements for silver futures accounts, permits the inference that Bache knew that the purpose of these loans was to help the Hunts maintain and build their silver positions in the face of Comex’s efforts to force them to reduce their positions.

There is also evidence permitting the inference that Bache protected the Hunts from Comex regulation by refusing to aggregate and reduce the Hunt accounts after Comex imposed position limits and aggregation rules on January 7, 1980, despite two instructions from Comex to do so.

*694 3) Motivation

Minpeco has produced evidence which supports two motives for Bache's participation in the alleged conspiracy. First, in 1979 commissions from the Hunt loans constituted almost 90% of the annual income of Charles Mattey, the Hunts’ senior account executive at Bache. 10 Bache treasurer Langdon Stevenson testified on deposition that he thought that at least “to some degree” these commissions affected Mat-tey’s objectivity in casting votes on the Bache commodity credit committee in favor of extending credit to the Hunts. 11 Second, beginning in October 1979, Bache received significant assistance from Bunker and Herbert Hunt in fending off a hostile takeover. In April 1980, William Marlin, vice-chairman of the Bache Board, told the Bache audit committee investigating Bache’s involvement in the silver crisis that the fact that the Hunts owned Bache stock had an impact on the Bache board’s dealings with the Hunts — although his testimony also indicates that he did not think that Bache gave the Hunts extra time to meet their obligations when the price of silver plummeted. 12 This evidence permits an inference that the financial well-being of Mattey, Bache, and the Hunts were highly inter-connected and demonstrates, at the least, that this is not a case where there was no rational economic motive to conspire. See Matsushita, 106 S.Ct. at 1361.

C. Merrill Lynch, Pierce, Fenner & Smith, Inc.

The record reflects that beginning in 1974, Merrill Lynch maintained a close financial relationship with Herbert and Bunker Hunt. IMIC from its inception also traded through Merrill Lynch, and in 1979-1980 Merrill Lynch lent both the Hunts and IMIC substantial sums. As with ACS and Bache, Minpeco has presented evidence which raises genuine issues for trial as to Merrill Lynch’s knowledge of and participation in the conspiracy.

1) Knowledge of the Conspiracy

In addition to the evidence of economic indicators demonstrating market manipulation discussed above, Minpeco has presented evidence permitting an inference that Merrill Lynch had specific knowledge of the scope of the conspiracy. First, there is evidence supporting the claim that Merrill Lynch knew, as early as August 1979, that IMIC was a partnership between the Hunts and several Arab investors. There is also evidence to support an inference that Merrill Lynch knew of the connection between BPS and Fustok by December 1979. Finally, it is undisputed that Merrill Lynch knew that in 1977, after Merrill Lynch had financed the Hunts’ trading in soybean futures, the Hunts were found guilty by the CFTC of violating commodities laws in connection with the soybean futures market. This knowledge of the Hunts’ past commodities violations, in combination with the objective economic factors indicating market manipulation in 1979-1980, supports a reasonable inference that Merrill Lynch knew of the alleged conspiracy.

2) Acts in Furtherance of the Conspiracy

As with Bache and ACS, Minpeco alleges that Merrill Lynch assisted the conspiracy by permitting manipulative trading, loaning money to the conspirators, and deceiving the regulators. Two genuine issues for trial deserve mention. First, there is evidence which could permit the inference that the purpose of the large loans made to the Hunts and IMIC in 1979-1980 was to finance the Hunts’ deliveries of silver in furtherance of the alleged conspiracy. Although Merrill Lynch characterizes the loans as normal business transactions equally consistent with permissible behavior as with participation in a conspiracy, there is support in the record for the con- *695 elusion that the decision to finance the Hunts’ deliveries was a controversial departure from the norm. Second, there is evidence that when the CFTC contacted Merrill Lynch in early September 1979 to inquire who owned and controlled IMIC, Merrill Lynch representatives denied having such information, even though it is clear that Merrill Lynch knew from the time of IMIC’s incorporation that the Hunts substantially controlled IMIC. While Merrill Lynch has presented evidence indicating that later in September Merrill Lynch pressured IMIC to disclose the Hunts’ interest to the CFTC, it is the jury which must decide the weight to be assigned to conflicting evidence.

3) Motivation

Minpeco alleges that Merrill Lynch’s motivation to participate in the conspiracy arose from the significant commission and interest income produced by the Hunt accounts and from Merrill Lynch’s desire to keep the Hunts’ goodwill. Merrill Lynch, in response, argues that any interest it had in keeping the Hunts’ accounts was far outweighed by its interest in preserving its reputation and maintaining a healthy commodities market for all of its customers. Merrill Lynch also contends that Minpeco’s claims against it are internally inconsistent: in its conspiracy claims, Minpeco charges that Merrill Lynch schemed to assist traders with long silver futures positions to raise silver prices, but in its breach of fiduciary duty claims, Minpeco charges that Merrill Lynch encouraged Minpeco to sell silver shor