NEW YORK - Five banks at the centre of London's gold trade have been sued in New York for manipulating prices, in the latest accusation of fraudulent collusion in the global finance hub.
A class-action suit was filed by US gold futures and options trader Kevin Maher against Bank of Nova Scotia, Barclays Bank, Deutsche Bank, HSBC, and Societe Generale, all involved in setting the London Gold Fix, a twice-daily benchmark price used as a reference for trade in gold and gold derivatives.
The suit, lodged in the federal district court in New York late Monday, alleges that since at least 2004 the banks worked together to manipulate the prices of gold and gold derivatives contracts.
Maher cited recent studies and analyses, published and unpublished, that indicate gold prices "have been manipulated by and during and around the times of the Gold Fix." Maher also alleges that some regulators and the banks themselves have investigated possible fraud in the way the Gold Fix works, with one, Deutsche Bank, deciding in January to withdraw from the panel which sets the price.
He said he and others who trade gold contracts on the Comex exchange were affected by the alleged manipulation, and the lawsuit is open for others to join.
The lawsuit comes after wide-ranging official probes into manipulation of the crucial Libor London interest rate benchmark, and foreign exchange rates, by traders at large banks.
Societe General called the Gold Fix suit "groundless" and said in a statement to AFP that it would contest the accusations.