Chelsea 0207 228 2020

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Possible Manipulation of gold and silver prices 1999-onward – Proposed Class Action

Possible Manipulation of gold and silver prices 1999 – onwards

Proposed Class Action Representing Investors Worldwide

Since 2016, there is a growing body of evidence that shows well known financial institutions may have combined:

  1. Together to manipulate the outcome of the London Gold Fixing around 2004 onwards.
  2. To manipulate the outcome of the London Silver Fixing around 1999 and onwards.

If proved, the effect of this was to create false market prices, in particular by artificially depressing prices after the 3pm (London time) Gold Price Fixing and to increase bid-offer spreads in physical gold, physical silver and their respective derivative instruments.

It is alleged that the intention to these institutions was to increase their profits from their own activities in these markets at the expense of other market participants who have therefore suffered loss and damage, probably running into hundreds of millions of pounds in aggregate.

In April 2016 it was publicly announced that Deutsche Bank had agreed to settle two claims against it in the U.S. District Court in Manhattan that it had conspired with other financial institutions to fix gold and silver prices at the expense of investors.  The agreed terms in relation to the Gold and Silver market have now been made public and settlements of $60 million and $38 million, respectively, have been agreed with between Deutsche Bank and the Claimant investors.

An important part of the settlement is that Deutsche Bank have agreed to disclose documents and information to assist the investors to pursue claims against the other conspirators. Following on from this development, 

  1. In June 2017 a trader connected with Deutsche Bank has pleaded guilty to “spoofing” gold, silver, platinum and palladium futures between December 2009 and (or around) February 2012. (spoofing involves traders placing orders that they never intend to fill, in an attempt to manipulate the price) https://www.bloomberg.com/news/articles/2017-06-05/chats-by-metals-trader-reveal-spoofing-tricks-from-the-master
  2. The trader’s guilty plea implicates other traders within his bank re “co-ordinated spoofing” which occurred on hundreds of occasions. Additionally, the evidence that has been provided includes secret electronic chats involving traders and submitters across a number of other financial institutions, and shows a multi-year, well-coordinated and wide-ranging conspiracy to manipulate prices. This new evidence implicates 4 new financial institutions who were not previously thought to be involved.
  3. In connection with the involvement of new institutions, an ex UBS trader has recently been arrested (September 2017) in connection with metals manipulation. https://www.bloomberg.com/news/articles/2017-09-13/ex-ubs-trader-accused-by-u-s-of-manipulating-metals-prices
  4. Litigants in the United States are now requesting permission to file a new complaint with additional allegations. It is perhaps also possible that more evidence of ongoing market manipulation will be revealed.
  5. Separately, in the United States, the New York 2nd U.S. Circuit Court of Appeals has ruled that District Court Judge Paul A. Engelmayer erred in dismissing the private antitrust law suit,Wacker v. JPMorgan Chase & Co et al that accuses JP Morgan of COMEX silver price rigging in violation of the Sherman Act. The Appeals Court Order essentially reverses the dismissal of the Plaintiffs’ case by the District Court and sends it back to the District Court to be further litigated consistent with the legal findings of the Appeals Court Order.

If plaintiffs in the US proceedings succeed in their claims, they could be entitled to treble damages under anti-trust laws.

The court actions currently before the US Courts against financial institutions and their traders are currently evolving as more evidence comes to light.

We believe that the same financial institutions could have a case to answer before the Courts in England & Wales for the manipulation of gold and silver prices.

Market participants who have suffered loss and damage are entitled to claim damages under Section 2 of the Competition Act 1988 in proceedings in the Competition Appeal Tribunal (“CAT”) in a class action where there have been agreements between parties that may affect trade within the United Kingdom and which effect the prevention, restriction or distortion of competition within that jurisdiction. These provisions include agreements, decisions or practices that directly or indirectly fix purchase or selling prices.

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Introduction to Leon Kaye Solicitors

Leon Kaye Solicitors was established in 1974 and since the mid-1990s have developed particular experience and expertise in the specialised field of class action litigation, specifically in relation to investments/collective investments.  Major class action cases include the recent settlement of the RBS action, claims in respect of Business Expansion Schemes, Resort Hotels, Equitable Life, Royal Bank of Scotland’s 2008 Rights Issue and Split Capital Investment Trusts.

On behalf of clients, the firm have established two important court rulings which are fundamental to the ability of class action claimants to participate in such claims on a reasonable risk/reward basis:

  1. Court of Appeal Judgement in Ward and Others v Guinness Mahon (1996 4 ALL ER112 and 1996 1WLR 894) was a huge step forward as it meant that any Class Action in the future could be pursued on the basis that an Advance Costs Sharing Order could be obtained and the previous risk of a crippling Cost Order against individual members of the Action Group i.e the Class Action Claimants would at the worst only have to pay their share of any costs.
  2. High Court Judgment in RBS Rights Issue Litigation where on 12 February 2014, Mr Justice Hildyard agreed that with proposal submitted by Leon Kaye Solicitors (and opposed by lawyers of the other claimants groups) in relation to the potential distribution of any adverse costs liability in the context of a class action was ‘the fairest solution.’ Please see the following link: (seehttps://7kbw.co.uk/wp-content/uploads/2016/05/THE_RBS_RIGHTS_ISSUE_LITIGATION.rtf.pdf

Leon Kaye Solicitors are working closely with Own Bullion ( https://www.ownbullion.com/precious-metals-price-manipulation-investors-fight-back/ ) which is a free community for the mining and metals industries. A number of investors have already expressed an interest in joining a potential class action.

Investors in various jurisdictions who believe they have been affected by price manipulation of gold and silver prices have already contacted Leon Kaye Solicitors and expressed an interest in joining a class action to recover their losses.

We invite any investors WORLDWIDE who believe that they may have been adversely affected by the alleged manipulation of the market price for gold and silver by financial institutions to contact this firm for further information by email on sunilp@leonkaye.co.uk or by telephone on 0207 228 2020.