are more than fifty approved brands of silver deliverable against Comex silver futures contracts.

The Comex silver market is utilized not only by

United States interests but also by foreign interests.

However silver is traded worldwide not only on Comex, the

Chicago Board of Trade and the Midamerica Commodity Exchange, but also in London, Zurich and Hong Kong.

In 1974, Nelson Bunker Hunt and W. Herbert Hunt

(for purposes of this statement, Nelson Bunker Hunt and w. Herbert Hunt, together with other members of the Hunt family and various corporations in which the Hunts have a material interest are collectively called the "Hunt Group") acquired a substantial position in silver futures contracts on Comex and, during the five years subsequent thereto, maintained that position and continually moved it forward to more distant maturities, without incident. During that five year period, the Control Committee and the Board continually reviewed and monitored the Comex silver market, with an awareness of the positions of the Hunt Group. No evidence was discovered during that period which might have suggested the presence of any squeeze, corner or other attempt to manipulate the silver market and the market was maintained in an orderly fashion and each maturing futures contract liquidated properly. At this juncture it should be noted that Comex's self-regulatory responsibilities and powers

extend only to its members, not to customers of members. From September 1979 through March 1980, the silver

market at Comex came under increasingly intensive scrutiny at Comex as the result not only of the Hunt Group but also the introduction of additional substantial participants in the market including particularly: (1) Mr. Naji Nahas, a Brazilian investor; (2) Banque Populaire Suisse through an omnibus account that represented an aggregate of approximately 45 customers; and (3) affiliates of the clearing member that maintained those accounts ("Foreign Investors") and the other events hereinafter discussed.

III.

Summary of Events and Highlights

The Board of Comex, which customarily meets once a month, found a need, based principally upon the large positions in the silver market and the potential for market congestion created by those positions, to meet seven times in September 1979, five times in October 1979, four times in November 1979, four times in December 1979, eight times in January 1980, twice in February 1980 and four times in March 1980. At virtually all of those meetings, reports were received from the Comex Control Committee (a group of essentially non-participants in the silver market who receive market sensitive information from the Association) and the silver market was reviewed and discussed. The Control Committee at Comex is responsible for surveilling the markets and evaluating whether maturing futures contracts

will liquidate upon their maturity in an orderly fashion. The Control Committee regularly reports to the Board on the results of its continuing oversight. During those five months, Comex was in continual contact with representatives of the Commodity Futures Trading Commission ("CFTC") for the purpose of exchanging information about large participants in the silver market and discussing the possible need for exchange action. Information was also exchanged during that

period with the Chicago Board of Trade.

A series of actions were taken by Comex in an

attempt to: (1) avoid the possibility of any manipulation, squeeze or corner in the silver market; (2) continue the viability of the silver futures market; (3) insure the continuing financial integrity of the marketplace through increased margin requirements; (4) enable silver futures contracts to liquidate in an orderly fashion; (5) reduce the overall open interest in silver; and (6) curb potentially excessive speculation in the silver market. Original margin requirements were increased on six occasions, maximum permissible daily price fluctuations were increased three times and other actions hereinafter discussed were taken. The Comex Board is the most well balanced of all

contract market boards in this country. It is comprised of seven representatives of the metal trade, seven representatives of futures commission merchants, seven representatives of the floor community, two members not

affiliated with any of those groups, and two public mem

bers.

Hereto attached as Exhibit 1 is a list of the members

However,

of the Comex Board during the relevant period. during the meetings held by the Comex Board in September 1979 the Board became increasingly concerned about the fact that many of its members, directly or through their employers, either maintained positions in the silver market or had discretionary authority over persons participating in the market.

The Board concluded at its meeting of October 4, 1979, that a Special Silver Committee, to consist only of impartial and disinterested Board members, would be desirable to monitor the silver market and to take all action necessary to deal with the potential congestion developing in December, 1979 silver. Since the aggregate positions of the Hunt Group and the Foreign Investors were so substantial, it was believed that those positions would require virtually daily review and attention and that either the cooperation of such investors or market action by the Committee would be necessary to permit the orderly liquidation of December 1979 silver futures contracts.

From October through December the Special Silver Committee engaged in numerous telephone conversations and formally met twelve times. During those meetings, members and representatives of the Hunt Group and the Foreign Investors were interviewed by the Committee and arrangements

were made with them to take certain steps under certain market conditions with respect to their December positions designed to insure an orderly liquidation of the December 1979 silver futures contracts (including, moving forward to more distant maturities, portions of their existing December 1979 silver positions. In addition, the Committee continually reviewed margin requirements, permissible daily price fluctuations, the possibility of recommending to the Board the imposition of position limits, and conducted depositions of certain member firms of the Exchange who maintained accounts for Foreign Investors in order to obtain more information about the Foreign Investors.

Through the efforts of the Special Silver Committee and the cooperation received from the Hunt Group and Foreign Investors and the member firms of Comex at which accounts for those investors were maintained, the December silver market liquidated in an orderly fashion. On January 7, 1980, the Board met to review the then existing situation in the silver market with a particular view toward the size of positions of the Hunt Group and Foreign Investors in 1980 maturities, and the extent to which new speculative interests were appearing in the silver market. By that time, many Board members who maintained positions in the silver market in 1979 directly (or indirectly through their employers) had closed out those positions. The Board became concerned that the available