Legal hassles for major global banks continue unabated. A federal judge has ruled that gold and silver investors may pursue their respective cases against banks for alleged price manipulations.
The U.S. District Judge – Valerie Caproni – in Manhattan, rejected appeals by The Bank of Nova Scotia (BNS - Free Report) , HSBC Holdings Plc (HSBC - Free Report) , Barclays PLC (BCS - Free Report) and Societe Generale Group (SCGLY - Free Report) to dismiss the gold rigging lawsuit. Further, the judge rejected the appeal of Bank of Nova Scotia and HSBC to dismiss silver price manipulation case.
Notably, Swiss major – UBS Group AG (UBS - Free Report) – was able to win the dismissal of both cases. Caproni noted that there was no evidence to show that UBS had rigged gold and silver prices. Earlier in April, Deutsche Bank AG (DB - Free Report) had agreed to settle gold and silver price rigging cases, though the terms remained undisclosed.
The investors had alleged that banks had colluded to rig prices of gold, gold futures and options, and gold derivatives via twice-a-day meetings, to set the London Gold Fixing. In her ruling, Caproni mentioned that plaintiffs conceivably accused the banks of recklessly creating “artificial price dynamics” for gold. This is being claimed as the “proximate cause” of the price distortions. Hence, the plaintiffs can pursue anti-trust claims for alleged unlawful trade curtailment from Jan 2006 to Dec 2012. Nevertheless, a claim for unjust enrichment was dismissed.
In the silver price rigging lawsuit, plaintiffs had alleged that beginning 1999, banks had manipulated prices through secret meetings. The judge, in her ruling, stated that investors satisfactorily, "albeit barely," alleged that banks had violated the U.S. antitrust law by devising opportunistically to lower the Silver Fix from Jan 2007 to Dec 2013.
Notably, plaintiffs have been given 14 days by the judge to amend complaints on their respective cases.
Currently, Bank of Nova Scotia sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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