interesting teading

this is a story i cut from Lemetropolecafe.com and what a disgrace it is . If you see fit please follow the lead.

I've sent a complaint to the Australian Securities and Investment Commission in the following terms. Also sent a similar complaint to the ASX and some info to Jamie Freed at the Sydney Morning Herald.

Wouldn't hurt for others to make similar complaints. I don't expect it to get very far but I want to make a point about how seriously this should be taken.

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Goldman Sachs JBWere insider trading on Lihir dehedging?

Timeline:
* Goldman Sachs massively reduces their gold contract short position on TOCOM (Tokyo commodity exchange) during the 16 April session.
* On that day at 7:12pm (Sydney time) Lihir announces shares will be suspended.
* On 17 April 10:25am (Sydney time) Lihir announces a US$1.2 billion dehedging in part underwritten by Goldman Sachs JBWere.

Adrian Douglas is a contributor to Lemetropolecafe.com. He wrote:

"In the April 16 session on the TOCOM Goldman Sachs COVERED a simply gob-smacking 8,302 short contracts to bring their short position to 23,019 contracts. This is the second time in 5 weeks that they have made a massive one day short covering. The last time was on March 6 when they covered 7,878 contracts. This brings their short position to the second lowest since I started recording the daily data on Jan 13, 2006. On that day their net short was just 470 contracts lower at 22,549 contracts."

TOCOM is unusual in that they publish details of the short and long positions of individual participants.

The background is that Goldman Sachs has almost no long gold positions on TOCOM at all. For long periods, they have had absolutely no long position. Yet at the same time they have massive short positions. This strongly suggests they are trading for their own account, and not for clients.

You may wish to contact Adrian Douglas for more detail.
[email protected]

One explanation is that Goldman Sachs were operating on their client's behalf, locking in favourable prices for the spot gold to be purchased later. However it seems odd that they would do this by covering an existing short position, and not take long positions which have unlimited upside.

I would be interested to know if Goldman Sachs even has a role in buying the bullion on behalf of Lihir, or whether they are merely underwriting the share issue. Perhaps you could find out?

Goldman Sachs did massive covering on TOCOM on April 16, right before the announcement. They also covered massively on March 6. I would be interested to know when Goldman Sachs JBWere were first informed of Lihir's plan to dehedge.

As a Lihir shareholder I am concerned that Goldman Sachs has used inside information to profit at a cost to its client, by supporting the price of gold at the time the client was making estimates of the capital to be raised, and/or at the time the spot gold purchases will be made.