PHILADELPHIA, Pa. Oct. 6, 2016 - Judge Valerie Caproni of the
United States District Court for the Southern District of New York
issued two lengthy opinions on October 3 permitting consolidated
class action lawsuits on behalf of proposed classes of investors in
physical gold and gold derivatives and physical silver and silver
derivatives to proceed to discovery.
The cases concern the London Gold Fix and the London Silver Fix,
which are key benchmark rates for gold, silver, and related
financial instruments. For many years, The Bank of Nova
Scotia, Barclays, Deutsche Bank, HSBC, and Société Générale met in
private to conduct the Gold Fix. Similarly, for many years,
The Bank of Nova Scotia, Deutsche Bank, and HSBC met in private to
conduct the Silver Fix. The investor Plaintiffs (who sold
physical gold and silver and related futures and options contracts
on these metals) accused the Fixing Bank Defendants of utilizing
their preferred positions at the Gold and Silver Fixes to collude
and effectively "name their own" Fix price and thereby gain an
unfair advantage with respect to the contracts, derivatives, and
physical positions that they held in the market, all of which were
correlated to the Fix price in one way or another.
In her opinion, Judge Caproni concluded that the investor
Plaintiffs had sufficiently stated a claim for conspiracy in
restraint of trade against the Fixing Bank Defendants. Judge
Caproni further determined that the investor Plaintiffs have
standing to bring antitrust and Commodity Exchange Act claims
against the Fixing Bank Defendants. The investor Plaintiffs
had also named UBS as a defendant in both cases, but Judge Caproni
dismissed UBS as a defendant noting that it was not a party to
either the Gold or Silver Fix. Judge Caproni also dismissed
certain claims brought by ETF investors.
The cases will now proceed into discovery.
Judge Caproni previously appointed Berger & Montague, P.C.,
led by managing shareholder Merrill G. Davidoff, as co-lead counsel
in the case concerning the Gold Fix. Berger & Montague,
P.C. is also class counsel in the case concerning the Silver
Fix. Prior to Judge Caproni's ruling on the motions to
dismiss, the investor Plaintiffs entered into settlements in both
cases with defendant Deutsche Bank.
& Montague, P.C.
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