In a surprising development, a group of plaintiffs in an antitrust
litigation case against Deutsche Bank, HSBC Bank plc, the Bank of Nova
Scotia, and UBS AG, have just announced that Deutsche Bank is in the process
of negotiating the formal terms of a settlement agreement with the plaintiffs.
Deutsche Bank, HSBC and Scotia are the only members of the London Silver
Market Fixing Limited, a private company that had operated the London Silver
Fixing auctions until mid August 2014, after which time that auction was
superseded by the LBMA Silver Price auction.
The case (# 1:14-md-02573-VEC) is being overseen as a class action suit by
federal judge Valerie E Caproni in the US District Court for the Southern
District of New York. A large number of different plaintiffs had taken
similar actions and the cases were consolidated into one class action suit.
The plaintiffs allege in the suit that Deutsche Bank, HSBC and Scotia
colluded to fix the price of silver futures by publishing false silver
prices, so that they, as members of London Silver Market Fixing Company would
benefit (from the price movements).
The full 1 page letter from the plaintiffs legal representatives Lowey
Dannenberg, Cohan & Hart can be read here -> Deutsche
letter to Caproni – 13 April 2016 – London Silver Fixing – Lowey Dannenberg
Cohen Hart.
In a shocking development for the remaining defendants and the entire
future of the current LBMA Silver Price auction, owned by the LBMA,
administered in London by Thomson Reuters and calculated by the CME
Group, the letter states that:
“In addition to valuable monetary consideration, Deutsche Bank has
also agreed to provide cooperation to plaintiffs, including
the production of instant messages, and other electronic communications,
as part of the settlement. In Plaintiff’s estimation, the cooperation to be
provided by Deutsche Bank will substantially assist Plaintiffs
in the prosecution of their claims against the non-settling defendants.”
The plaintiffs include Modern Settlings LLC (of New York and Florida),
American Precious Metals Ltd, Steven E Summer, Christopher Depaoli, Kevin
Maher, Jerry Barrett, Rebeccca Barrett, KPFF Investment Inc, Don Tran, and
Laurence Hughes.
The defendants include Deutsche Bank AG and various other Deutsche Bank
entities, HSBC Bank Plc, HSBC Bank USA NA, HSBC Holdings Plc, and various
other HSBC entities, The Bank of Nova Scotia, and various other Scotia
entities, and finally The London Silver Market Fixing Ltd.
Coming on the heels of the unresolved and unexplained fiasco that is the
LBMA Silver Price auction and the broken promises by the London Bullion
Market Association (LBMA) about greater auction transparency and wider
participation in the new Silver auction (see BullionStar blog “The
LBMA Silver Price – Broken Promises on Wider Participation and Central
Clearing“) it seems difficult to envisage that the LBMA Silver Price can
survive in its current form, with its current participants, of which 2 of the
remaining 5 participants are HSBC and Scotia. It will also be interesting to
see what the Financial Conduct Authority (FCA) will say about this
development with Deutsche Bank, especially in light of the fact that HSBC and
Scotia are now participating in a ‘Regulated Benchmark’ (the LBMA Silver
Price), where price manipulation can be criminally prosecuted.
The directors of the London Silver Market Fixing Limited company in the
months before it ceased doing the London Silver Fixing auctions, were Simon
Weeks of Scotia, Matthew Keen of Deutsche Bank, and David Rose of HSBC, with
alternate directors of David Wilkinson of Scotia, James Vorley of Deutsche
Bank and Peter Drabwell of HSBC. Since the above list was drawn up, UK
Companies House filings show that, for London Silver Market Fixing Limited,
David Rose ceased to be a director on 5 January 2016, David Wilkinson ceased
to be a director on 16 October 2015, James Vorley ceased to be a director on
27 May 2014, and Matthew Keen ceased to be a director on 18 February 2014.
According to those filings, it means that Simon Weeks of Scotia and Peter Drabwell
of HSBC are still directors of the company that is a defendant in the above
New York class action suite.
Surprisingly to some, Simon Weeks of Scotia is listed on the website of
LBMA Silver Price administrator Thomson Reuters as still being a member of
the LBMA Silver Price Oversight Committee. See list here.
Furthermore, the same Simon Weeks is still listed as being a member of the LBMA
Gold Price Oversight Committee, chaired by ICE Benchmark Administration.
See list here.
Some of the above directors names will also be familiar to readers as
directors of the London Gold Market Fixing Limited company, as profiled in
the ZeroHedge article “From
Rothschild To Koch Industries: Meet The People Who “Fix” The Price Of Gold“.
Ronan Manly
E-mail Ronan Manly on:
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