Goldman, BASF, HSBC accused of metals price fixing: U.S. lawsuit

Wed Nov 26, 2014 1:24pm EST
 
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By Jonathan Stempel

NEW YORK (Reuters) - Goldman Sachs Group Inc (GS.N: Quote), Germany's BASF SE (BASFn.DE: Quote) and two other big platinum and palladium dealers have been sued in the United States in what the plaintiff's law firm called the first nationwide class action over alleged price-fixing of the metals.

In a complaint filed on Tuesday in the U.S. District Court in Manhattan, units of Goldman, BASF, HSBC Holdings Plc (HSBA.L: Quote) and South Africa's Standard Bank Group Ltd (SBKJ.J: Quote) were accused of having conspired since 2007 to rig the twice-daily platinum and palladium "fixings" and the prices of futures and options based on those fixings.

The plaintiff, Modern Settings LLC, a Florida-based maker of jewelry and police badges, claimed metals purchasers lost millions of dollars.

The defendants illegally shared customer data, used that information to engage in "front-running" of expected price moves, and manufactured phantom "spoof" orders, according to the plaintiff.

Platinum and palladium are used in catalytic converters to curb vehicle emissions, and are also used in dentistry and jewelry.

On Oct. 16, the London Metal Exchange said it will on Dec. 1 take charge of platinum and palladium price fixing, and use a new electronic platform.

The Hong Kong Exchanges and Clearing Ltd (0388.HK: Quote) unit said the platform would replace a benchmark system established in 1989, and run by Goldman, BASF, HSBC and Standard.

The complaint said such changes "have come too late" for Modern Settings and other prospective class members. The complaint seeks unspecified damages for the defendants' alleged violations of U.S. antitrust and commodities laws.   Continued...

 
A view of the Goldman Sachs stall on the floor of the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermid