Banks Said to Face U.S. Manipulation Probe Over Metals Pricing
(Bloomberg) — The U.S. Justice Department is investigating whether the world’s biggest banks manipulated prices of precious metals such as silver and gold, according to people familiar with the matter.
At least 10 banks, including Barclays Plc, JPMorgan Chase & Co., and Deutsche Bank AG are being probed by the Justice Department’s antitrust division, said one the people, who asked not to be named because the matter is confidential.
The metals investigation, which is in the early stages, broadens the Justice Department’s ongoing scrutiny of banks over manipulation of financial benchmarks. Prosecutors are conducting criminal investigations into the alleged rigging of interbank lending rates and currency markets.
HSBC Holdings Plc disclosed Monday that the Justice Department and U.S. commodities regulators have sought documents from the bank on precious-metals dealings. The bank said it is cooperating in the probes. Spokesmen for the Justice Department and the Commodity Futures Trading Commission declined to comment.
The other banks under investigation are Credit Suisse Group AG, UBS Group AG, Goldman Sachs Group Inc., Societe Generale SA, Bank of Nova Scotia, and Standard Bank Group Ltd., the person said. The Wall Street Journal reported earlier that those banks were being investigated. The banks either declined to comment or didn’t immediately respond to requests for comment.
‘Conduct Issues’
Three banks that settled currency-manipulation claims with U.S. regulators in November — JPMorgan, Citigroup Inc. and Bank of America Corp. — were required under terms of those agreements to review and identify “other trading activities that could raise similar market conduct issues.” Those reviews triggered scrutiny of precious metals trading, another person familiar with the matter said.
Fixings, price-setting rituals dating back a century for gold, silver, platinum and palladium, are being overhauled as scrutiny increases over how market benchmarks are set. Switzerland’s regulator said in November that it found “serious misconduct” by UBS employees in precious metals trading. Barclays was fined in May by the Financial Conduct Authority after a trader sought to influence the gold fix in 2012.
HSBC, Barclays and Deutsche Bank are among banks that have been sued in the U.S. over claims they conspired to manipulate precious metals prices for years.
London-based HSBC also is under a five-year deferred prosecution agreement with the Justice Department from a previous money-laundering settlement. The agreement requires the bank to cooperate in other probes.
–With assistance from Elizabeth Dexheimer in New York and Alfred Liu in Hong Kong.
To contact the reporters on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net; Tom Schoenberg in Washington at tschoenberg@bloomberg.net To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net Paul Panckhurst
