This is an article i came across today on Kitco news.... I wonder if anything will come of it?
DoJ, CFTC Investigating 10 Banks For Manipulating Precious Metals Markets
By Kitco News
Tuesday February 24, 2015 12:00 PM
(Kitco News) - According an article in the Wall Street Journal, at least 10 major banks are being investigated by the Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC) for possibly manipulating the precious metals market.
The article quotes people close to the investigation, who say the DoJ's antitrust division is scrutinizing the London price setting process for gold, silver, platinum and palladium markets; at the same time the CFTC has opened a civil investigation.
According to the article, the 10 banks under investigation are: The Bank of Nova Scotia, Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Socit Gnrale SA, Standard Bank Group Ltd., UBS AG and HSBC.
Monday, in its fourth quarter earnings report, HSBC said the DoJ issued a document request in November "seeking the voluntary production of certain documents." The company also said that in January the CFTC issued a subpoena to HSBC Bank USA, "seeking the production of certain documents related to HSBC Bank USA's precious metals trading operations."
The company said they are cooperating with the authorities in their investigations and that the matters are still at an early stage.
But it's not just financial regulators that are looking into the bank, for the precious metals sector, HSBC said that numerous putative class actions have been filed against HSBC Bank USA and other members of the London Platinum Palladium Fixing Company.
"Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC," the company said.
The Wall Street Journal article noted that more than 25 lawsuits have been filed against banks that make up the London Gold Fixing Company: HSBC, Bank of Nova Scotia , Barclays, Socit Gnrale and Deutsche Bank.
The precious metals market is the latest to be investigated as world regulators look at potential benchmark manipulation. In November, the Switzerland financial regulator body said that it had found a "clear attempt" to manipulate precious metals benchmarks as part of an investigation into trading at UBS.
Since last year, researchers have been presenting a variety of evidence to demonstrate that precious metals markets have been manipulated during the price fixing auction.
In April of last year, Rosa Abrantes-Metz a professor at the New York University of Stern School of Business talked with Kitco News about her findings saying that her research shows a number of "red flags" indicating abuse in the gold spot price during the fixing.
In July Kitco News interviewed Andrew Caminschi, a researcher at the University of Western Australia, who published a report that found "strong empirical evidence that price behavior of the fixing is significantly different to that of open markets instruments (spot and silver futures) trading at the same time.
DoJ, CFTC Investigating 10 Banks For Manipulating Precious Metals Markets
By Kitco News
Tuesday February 24, 2015 12:00 PM
(Kitco News) - According an article in the Wall Street Journal, at least 10 major banks are being investigated by the Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC) for possibly manipulating the precious metals market.
The article quotes people close to the investigation, who say the DoJ's antitrust division is scrutinizing the London price setting process for gold, silver, platinum and palladium markets; at the same time the CFTC has opened a civil investigation.
According to the article, the 10 banks under investigation are: The Bank of Nova Scotia, Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Socit Gnrale SA, Standard Bank Group Ltd., UBS AG and HSBC.
Monday, in its fourth quarter earnings report, HSBC said the DoJ issued a document request in November "seeking the voluntary production of certain documents." The company also said that in January the CFTC issued a subpoena to HSBC Bank USA, "seeking the production of certain documents related to HSBC Bank USA's precious metals trading operations."
The company said they are cooperating with the authorities in their investigations and that the matters are still at an early stage.
But it's not just financial regulators that are looking into the bank, for the precious metals sector, HSBC said that numerous putative class actions have been filed against HSBC Bank USA and other members of the London Platinum Palladium Fixing Company.
"Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC," the company said.
The Wall Street Journal article noted that more than 25 lawsuits have been filed against banks that make up the London Gold Fixing Company: HSBC, Bank of Nova Scotia , Barclays, Socit Gnrale and Deutsche Bank.
The precious metals market is the latest to be investigated as world regulators look at potential benchmark manipulation. In November, the Switzerland financial regulator body said that it had found a "clear attempt" to manipulate precious metals benchmarks as part of an investigation into trading at UBS.
Since last year, researchers have been presenting a variety of evidence to demonstrate that precious metals markets have been manipulated during the price fixing auction.
In April of last year, Rosa Abrantes-Metz a professor at the New York University of Stern School of Business talked with Kitco News about her findings saying that her research shows a number of "red flags" indicating abuse in the gold spot price during the fixing.
In July Kitco News interviewed Andrew Caminschi, a researcher at the University of Western Australia, who published a report that found "strong empirical evidence that price behavior of the fixing is significantly different to that of open markets instruments (spot and silver futures) trading at the same time.
