Wed, 27 Oct 2021

NEW YORK - Goldman Sachs, HSBC Holdings, BASF SE, Standard Bank Group and HSBC are four platinum and palladium dealers to be sued by Modern Settings LLC, a Florida-based maker of jewelry and police badges, for allegedly fixing the price of precious metals.

The suit was filed in the Manhattan Federal Court on Tuesday by Modern Settings alleges the four companies have been engaged in the manipulation of prices of precious metals platinum and palladium for eight years.

Platinum and palladium are used both for making jewelry and for industrial use, such as the production of automotive catalytic converters, fuel cells, etc.

In the first class-action lawsuit of its kind in the US, the plaintiffs have accused the four banks of engaging in conspiracy since 2007 for fixing the prices of platinum and palladium and the prices of futures and options tied with those fixings.

The plaintiffs claim the manipulations of precious metals prices have cost purchasers millions of dollars.

Modern Settings, which bought the metals, has sued the four banks for using insider information to rig the twice-daily platinum and palladium fixings. The companies shared clients' confidential information including sales and purchase data and misused the information to manipulate client purchases and sale orders to profit from slight movements in the price of platinum group metals.

The illegal sharing of customers' data enabled the banks to undertake a "front-running" price manipulation, with the help of fabricating "spoof" orders, which Modern Settings claimed violates US antitrust and commodities laws,

"This unlawful behavior allowed defendants to reap substantial profits, while non-insiders, which include plaintiffs and members of the class, were injured," Modern Settings' lawyers stated.

Several similar other lawsuits have been filed this year against banks by the metals buyers, accusing them of fixing prices of gold and silver.

All four defendant companies refused to comment on the issue.

Several similar other lawsuits have been filed this year against banks by the metals buyers, accusing them of fixing prices of gold and silver.

Regulators world over have been tightening the screws on the global banks over the manipulation with some of benchmark rates - on the foreign exchange markets and the inter-bank London Interbank Offered Rate (LIBOR).

Earlier this year, the Swiss regulator became the first to confirm it had uncovered illegal currency rate rigging by world's leading financial organizations, Goldman Sachs, and HSBC included.

By November the world's biggest banks had agreed to pay out $4.3 billion to settle an investigation into their alleged rigging of foreign exchange rates.

London Metal Exchange last month said it will take charge of platinum and palladium price fixing, and use a new electronic platform from the 1st December, reported BBC.

The lawsuit however claims the changes "have come too late".

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