The lawsuit, which was originally filed in a New York district court by veteran litigator J. Scott Nicholson, a resident of Washington DC, alleged that the banks, which oversee the century-old silver fix manipulated the physical and COMEX futures market since January 2007. The lawsuit subsequently received class-action status. It was the first case to target the silver fix.
Many expected that this case would never go anywhere and that the defendant banks would stonewall indefinitely: after all their legal budgets were far greater than the plaintiffs.
Which is why we were surprised to read overnight that not only has this lawsuit against precious metals manipulation not been swept away, but that the lead defendant, troubled German bank Deutsche Bank agreed to settle the litigation over allegations it illegally conspired with Bank of Nova Scotia and HSBC Holdings Plc to fix silver prices at the expense of investors, Reuters reported citing a court filing by law firm Lowey.
Terms were not disclosed, but the accord will include a monetary payment by the German bank.
It goes without saying, that there would have been neither a settlement nor a payment if the banks had done nothing wrong.
According to Reuters, Deutsche Bank has signed a binding settlement term sheet, and is negotiating a formal settlement agreement to be submitted for approval by U.S. District Judge Valerie Caproni, who oversees the litigation. A Deutsche Bank spokeswoman declined to comment. Lawyers for the investors did not immediately respond to requests for comment.
As noted above, investors had accused Deutsche Bank, HSBC and ScotiaBank of abusing their power as three of the world’s largest silver bullion banks to dictate the price of silver through a secret, once-a-day meeting known as the Silver Fix.
None of this will come as a big surprise to readers, most of whom have been aware that this took place for years.
But wait there’s more.
In a curious twist, the settlement letter reveals a stunning development, namely that the former members of the manipulation cartel have turned on each other. To wit:
The full shocking letter can be read here:
Since this is just one of many lawsuits filed over the past two years in Manhattan federal court in which investors accused banks of conspiring to rig rates or prices in financial and commodities markets, we expect that now that DB has “turned” that much more curious information about precious metals rigging will emerge, and will confirm what the “bugs” had said all along: that the precious metals market has been rigged all along.
Finally, we’ll just remind readers that the US commodity “regulator”, the CFTC in 2013 closed its five year investigation concerning allegations that the biggest bullion banks manipulate silver markets and prices. It proudly reported in September 2013 that it found no evidence of wrongdoing and dropped the probe.
In light of this confirmation that the CFTC’s probe was “lacking” perhaps it is perhaps time for the so-called regulator who at the time was headed by ex-Goldmanite Gary Gensler, to reopen its investigation?