Attorneys for the Hunt brothers of Dallas said yesterday the price of silver skyrocketed in 1980 in reaction to extreme world events and not because the Hunts were buying millions of ounces of the metal.
The government contends that Nelson Bunker Hunt, William Herbert Hunt and other big-money traders made rapid and concerted silver purchases to manipulate world markets, which caused thousands of investors to lose billions of dollars.
The Hunts, however, said the disruption in the silver market was caused by the Soviet military movement into Afghanistan, the overthrow of the shah of Iran, the Organization of Petroleum Exporting Countries' raising the price of oil, and double-digit U.S. interest rates.
"We will establish that the culprits for the rise in price of silver in 1979 and 1980 are not represented in this courtroom," said Hunt attorney Paul Curran. "It is, I submit, patently implausible for any individual or group to have manipulated a worldwide, actively traded commodity for over six months."
The statements were the first time the Hunts have disclosed their defense in the case, which has been investigated by the Commodity Futures Trading Commission for more than five years.
The regulatory hearing to determine whether the Hunt brothers illegally manipulated the world silver market began with an order that the proceedings be open to the public.
Administrative Law Judge Arthur Shipe quickly denied a motion by the Hunts' attorneys to keep the hearings secret, issue a gag order on those involved and seal the record to protect their right to a fair hearing.
In his opening statement, Stephen Meyer, lead attorney for the federal agency, sketched a history of allegedly deceitful, concerted purchases of silver by the Hunts and several major traders that amounted to an illegal manipulation of the silver market.