Banks sued on claims of fixing the gold price
Duncan Richardson, News Editor
6 May 2014, 2:19 p.m.
Rumours have circulated for years that the gold price is subject to collusion. In March the first lawsuit questioning the integrity of the process underlying the London gold fix was filed. On Monday lawyers for more than 20 plaintiffs gathered in a Federal Court to coordinate their lawsuits against the five current members of the London gold fix.
The lawsuits have been filed by individual investors, hedge funds and large occupational pension funds, alleging that the banks used their unique positions as market makers to manipulate the price of gold to their own benefit.
One of the suits said, “The ‘great flaw’ of the gold fixing process is that the member banks trade on the information exchanged during the call to manipulate the price of gold and gold derivatives before publication of the gold fix to the wider market.”
The five current members of the gold fix are Societe Generale, Barclays Bank, Deutsche Bank, Scotia Bank and HSBC.