The Bank of Nova Scotia, Deutsche Bank and HSBC have been accused of fixing the price of trillions of dollars worth of silver, an allegation similar to earlier suits involving the London gold fix.
In a court case filed in New York’s southern district Monday, investor J. Scott Nicholson filed suit against the three banks for allegedly manipulating the price of silver and in the process, making money at the expense of smaller players.
Nicholson claims the banks abused their position and unlawfully manipulated the benchmark, violating antitrust laws and the Commodity Exchange Act.
“The nature of [the system] creates an environment that is highly susceptible to manipulation and collusion,” the lawsuit alleges. “The call itself is completely secret. There are no outside observers, and no recordings … have ever been released. There is no regulatory body that oversees the auction process or verifies the data submitted by defendants.”
A spokesperson for the Bank of Nova Scotia told Bloomberg that it would “vigorously defend” itself. HSBC and Deutsche Bank have not commented.
The litigation seeks unspecified damages, but other lawsuits have already been brought forward against banks named in the silver lawsuit and others, over similar alleged fixing in the gold market.
In January, Deutsche Bank announced it would no longer take part in the price-fixing markets for gold and silver. And British regulators fined a Barclays trader in May almost $50 million for attempts to fix the gold price.
Financial markets have come under serious scrutiny after the Libor (London Interbank Offered Rate) probe last year revealed that the London interbank offered rate was being manipulated.
8 Comments
Walking Man
“…making money at the expense of smaller players.”
Nothing new about pump and dump. OK, everyone (smaller players), let’s all invest $40 and become millionaires.
Gary
Maybe these companies should have a code of business conduct?
Johnrolce
If they are found guilty, their banking license should be revoked. There should be no too-big-to-fall players. They should not be above the law.
if I did something like this, I would go to jail.
LAMB
Remember the Texas guys who tried to corner the Silver market a decade ago? Greed continues to exist even though the criminals are caught – and Big Banking is no different.
SnakePlissken
The great and mighty capitalist system … fails again.
David Payant
No doubt, it is a great moment to buy silver, and hold on to it!
Geoff Kapyinanio
good luck pal…your going to get squashed by corporate lawyers….I have no faith in any other outcome happening.
chad
What a joke. But don’t worry, absolutely nothing will happen to them. Too big to fail… A big corrupt joke.