Glencore, JPMorgan sued over warehouse aluminum prices

Wed Aug 7, 2013 3:05pm EDT
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By Melanie Burton

SINGAPORE/LONDON (Reuters) - Glencore Xstrata (GLEN.L: Quote) and JPMorgan Chase & Co (JPM.N: Quote) face a U.S. lawsuit alleging they artificially inflated aluminum prices and disrupted supplies, as legal challenges related to metal warehousing piled up this week.

The suit, filed in a district court in Florida on Tuesday, also named Goldman Sachs (GS.N: Quote), the London Metal Exchange (LME) and subsidiaries of both JPMorgan and Goldman and accused the companies of antitrust practices and racketeering.

It was the second suit since last Thursday and expanded the geography and number of companies targeted. The first, filed last week in Detroit, named Goldman and the LME as defendants.

Coming hot on the heels of the first two, River Parish Contractors Inc, an aluminum and steel fabricator based in Reserve, Louisiana, registered its own action in a Louisiana district court on Wednesday.

All three seek class action status. Allegations center on Goldman and its warehouse company Metro, which plaintiffs accuse of violating antitrust laws by restraining supplies and inflating aluminum prices.

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.

The companies could face fines if the lawsuits are successful.   Continued...