Silver Manipulation Case Growing; Plaintiffs Wanting To Add More Banks To LawsuitBy Kitco News
Thursday December 08, 2016 13:32
(Kitco News) - Swiss Bank UBS might not be off the hook and could be back in court with four other new banks in an ever-evolving lawsuit that alleges manipulation of gold and silver prices during the daily fix.
A report filed in U.S. District Court in New York, Wednesday, provided evidence of collusion among the fixing banks: The Bank of Nova Scotia, Barclays, Deutsche Bank, HSBC, Societe Generale and UBS as well as other financial institutions that traded precious metals.
The latest court filings highlighted evidence collected after reviewing more than 350,000 pages of documents and 75 audio tapes that Deutsche Bank (DB) produced as part of the cooperation provisions of its Settlement Agreement with Plaintiffs.
“The DB Cooperation Materials provide direct, ‘smoking gun’ evidence of a conspiracy among the Fixing Members and several other silver market makers, including at least UBS, Barclays, Standard Chartered, Fortis, and Merrill Lynch, to illegally manipulate the price of silver and silver financial instruments at artificial, anticompetitive levels through multiple means,” the filing said.
According to the filings, along with the fixing banks, the plaintiffs alleging the manipulation now want to add the other banks to the lawsuit.
The documents noted that UBS was “the third-largest market maker in the silver spot market and could directly influence the prices of silver financial instruments based on the sheer volume of silver it traded.”
In an opinion delivered in October, Judge Valerie Caproni of the US District Court initially dismissed the allegations made against UBS, but still allowed for allegations to potentially be filed against it.
Along with phone conversations, the documents allege that traders colluded through electronic chatrooms, sharing their client’s positions in the silver market and suggesting that they could “smash” the silver fix by working together.
In these chats, traders would sometimes refer to their group as a “mafia,” a “dream team” and “stop busters.”