Startled by ’79 Silver Run-Up, Nelson Hunt Testifies
Texas oil billionaire Nelson Bunker Hunt defended himself and two brothers on Tuesday against charges that they had conspired to manipulate and corner the world silver market in 1979-80.
The Hunt brothers and several other defendants were sued in 1981 for $150 million by Minpeco SA, a Peruvian government-owned minerals company. Several other defendants, including leading U.S. brokerages Merrill Lynch & Co. and Prudential-Bache Securities, have paid tens of millions of dollars to settle out of court with Minpeco.
Hunt, under questioning by his lawyer, Paul Curran, said in U.S. District Court here that he began investing in silver in 1973 because, “I thought silver was an overall good investment.”
Hunt said that in September, 1979, the price of silver was between $10 and $12 an ounce, but by the end of the year it was selling for between $30 and $35, which he termed “very startling.”
Curran asked Hunt why he decided to buy silver during this period. “It was a very unsettling year politically,” he said.
Hunt pointed to such events as turmoil in the Middle East, including the overthrow of the Shah of Iran, the hostage-taking of American diplomats, the sharp run-up in oil prices, the invasion of Afghanistan by the Soviet Union and the takeover of the Grand Mosque in Mecca, Saudi Arabia.
Hunt said he believed that there was a “correlation” between the prices of oil and silver.
The Minpeco suit is the latest legal assault on the Hunt brothers arising from the silver dealings. The Hunts, who have also undergone congressional scrutiny, lost an estimated $1.3 billion in their alleged attempt to corner the world silver market and have since incurred massive losses in their oil businesses.
Nelson Bunker, William Herbert and Lamar Hunt were accused of plotting with wealthy Arab sheiks to manipulate the world price of silver. The price of silver rose from about $5 an ounce in 1979 to a high of $52 in 1980 before prices plunged.
The defendants in the suit are accused of seeking to corner the world silver market by buying up billions of dollars worth of silver in 1979-80.
