HSBC and Goldman Sachs accused of rigging platinum and palladium prices
Goldman Sachs and HSBC Holdings are being sued in New York over claims they conspired for eight years to manipulate prices for the precious metals platinum and palladium.
Goldman Sachs and HSBC Holdings are being sued in New York over claims they conspired for eight years to manipulate prices for the precious metals platinum and palladium in what plaintiffs' lawyers say is the first class-action lawsuit of its kind in the United States.
Standard Bank Group and a metals unit of BASF, the world's largest chemical company, are also sued.
The four companies used inside information about client purchases and sale orders to profit from price movements for the metals used in products ranging from jewellery to cars, according to a complaint filed in Manhattan federal court.
The lawsuit by Modern Settings, a jeweller that buys precious metals and derivatives set on their prices, claims the companies "were privy to and shared confidential, non-public information about client purchase and sale orders that allowed them to glean information about the direction" of prices.
Similar lawsuits have been filed this year in Manhattan accusing banks of rigging the benchmark price for gold. The authorities around the world are examining the gold market for signs of wrongdoing.
Regulators tightened scrutiny of benchmarks after uncovering price-rigging in interbank loan rates and currencies.
Silver became the first precious metal to change its traditional pricing procedure in August, and Intercontinental Exchange will run the replacement for the 95-year-old London gold fixing.
A new mechanism for platinum and palladium starts on December 1.
The biggest uses of the metals are for jewellery and producing catalytic converters, which curb harmful emissions from vehicles, according to the complaint.
Carmakers' use of platinum will climb 7.9 per cent to a six-year high of 3.39 million ounces this year, and there will be "broad-based growth" next year, car catalysts producer Johnson Matthey estimates.
Palladium car usage will rise 4.9 per cent this year to a record 7.3 million ounces.
"This unlawful behaviour allowed defendants to reap substantial profits, while non-insiders, which include plaintiffs and members of the class, were injured," lawyers for Modern Settings said in the filing.
The company needs a judge's approval before it can represent other buyers of the metals.
The gross demand for platinum and palladium last year was more than 8 million ounces and 9.6 million ounces, respectively, according to the complaint.
