Glencore, JPMorgan sued over warehouse aluminum prices

Wed Aug 7, 2013 8:27am EDT
 
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By Melanie Burton

SINGAPORE (Reuters) - Glencore Xstrata (GLEN.L: Quote) and JPMorgan Chase & Co (JPM.N: Quote) face a U.S. lawsuit alleging they artificially inflated aluminum prices, the second legal challenge related to metal warehousing in a week.

The suit, filed in a district court in Florida, also names Goldman Sachs (GS.N: Quote), the London Metal Exchange (LME) and subsidiaries of both JPMorgan and Goldman and accuses the companies of anti-trust practices and racketeering.

Frustration over long waiting times and inflated prices at metals warehouses across the world has led to growing criticism of banks that own commodity assets and trade raw materials.

U.S. regulators are scrutinizing ownership of commodity storage facilities by major U.S. banks.

Last week, Goldman and the LME were named as defendants in a separate Detroit lawsuit.

The latest case, filed by Florida-based aluminum user Master Screens and an individual plaintiff, expands the geography and number of companies being sued.

The companies could face fines if the lawsuits are successful.

Warehouse owners and outgoing LME CEO Martin Abbott have said the complaints over long lines at warehouses are unjustified, arguing there is no shortage of metal.   Continued...

 
A sign stands in front of the JPMorgan Chase & Co bank headquarters building in New York, March 15, 2013. REUTERS/Lucas Jackson