Barclays, Deutsche Bank Accused of Gold Fix Manipulation
Kevin Maher, a New York resident who said he bought and sold gold and gold futures and options, sued yesterday in Manhattan federal court claiming the five banks overseeing the century-old benchmark colluded to manipulate it.
Maher cited press reports in his complaint, including a Bloomberg News story last week on a draft paper by two researchers showing what they said were unusual pricing patterns connected to the gold fix. The paper was the first study to raise the possibility that the banks, which also include Bank of Nova Scotia, HSBC Holdings Plc (HSBA) and Societe Generale SA (GLE), may have been actively working together to manipulate the benchmark.
Authorities around the world, already investigating the manipulation of benchmarks from interest rates to foreign exchange, are also examining the gold market for signs of wrongdoing.
German financial markets regulator Bafin interviewed Deutsche Bank employees as part of a probe into the potential manipulation of gold and silver prices. Britain’s Financial Conduct Authority is also scrutinizing how prices are calculated.
Fix ‘Dated’
Scotiabank Chief Executive Officer Brian Porter said the process is outdated and should be reviewed. Speaking today in an interview at Bloomberg News in New York, he said he would welcome more members. “The fix is dated, it has been around for a long period of time,” Porter said on Bloomberg TV. “It should be reviewed and any degree of transparency we could bring to that would be healthy.” Porter said he couldn’t discuss the lawsuit. “We are comfortable how we run the business,” he said in an interview. “We are customer-focused and we will defend ourselves.”
Maher is seeking to represent a class of all investors who, from 2004 to now, held or traded gold and gold derivatives that were priced based on the gold fix or who held or traded COMEX gold futures or options. He’s seeking unspecified damages on behalf of the class. Damages may be tripled under U.S. antitrust law.
Read More: www.bloomberg.com/news/2014-03-04/barclays-deutsche-bank-accused-of-gold-fix-manipulation.html