Banks accused of rigging silver price

silver bars

Deutsche Bank, HSBC and Bank of Nova Scotia have been accused of attempting to rig the price of silver, in a lawsuit filed in the US.

The plaintiff alleges the banks, which set the price of silver each day, abused their position in the market.

Deutsche Bank and HSBC have not commented on the filing, while Bank of Nova Scotia told Bloomberg news agency it would "vigorously defend" itself.

The lawsuit follows similar filings in the gold price-fixing market.

Earlier this year, Barclays Bank was fined £26m ($44m) by UK regulators after one of its traders was discovered attempting to fix the price of gold.

No evidence

Investor Scott Nicholson from Washington said in the filing against the three banks for price-fixing: "The extreme level of secrecy creates an environment that is ripe for manipulation.

"Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large, illegitimate profits."

He is hoping other investors will come forward to launch a class-action lawsuit.

Last September, the US Commodity Futures Trading Commission said it had found no evidence of wrongdoing during a five-year investigation into the silver market.

Previous investigations by the US regulator also found no evidence of malpractice.

Both the price of gold and silver are fixed by a small number of banks every day during a conference call. This allows investors to buy and sell the precious metals at a single, quoted price.

Deutsche Banks announced earlier this year it would be withdrawing from the gold and silver price-fixing markets.

More on This Story

More Business stories

RSS

Features

  • Afghan interpetersBlacklisted

    The Afghan interpreters left by the US to the mercy of the Taliban


  • Prosperi in the 1994 MdSLost in the desert

    How I drank urine and bat blood to survive in the Sahara


  • photo of patient zero, two year-old Emile OuamounoPatient zero

    Tracking first Ebola victim and and how virus spread


  • Iranian Foreign Minister Mohammed Javad Zarif (left) and chief nuclear negotiator Abbas Araqchi wave to journalists from the Palais Coburg in Vienna (22 November 2014)Waiting game

    Journalists watch as nuclear talks go to the wire


From BBC Capital

Programmes

  • The challenge is to drop a bottle of water within 100 metres of this dummyClick Watch

    The race to get water – transported by drone – to a man stuck in remote Australia

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.