A lawsuit filed in the US by investor J Scott Nicholson alleges that HSBC, Deutsche Bank and the Bank of Nova Scotia rigged the price of silver.
The suit claims that the three banks abused their position of controlling the daily silver benchmark by unlawfully manipulating it to reap illegitimate rewards from trading. This action was detrimental to other investors in the US$5 trillion silver market, who base billions of dollars worth of transactions on the benchmark.
Nicholson said that in filing the suit, which claims that the banks violated antitrust laws and the Commodity Exchange Act (CEA), he aimed to represent a class of investors who have bought silver future contracts since 1 January 2007.
“The extreme level of secrecy creates an environment that is ripe for manipulation,” he added.
A spokesperson for the Bank of Nova Scotia told Bloomberg that it would “vigorously defend” itself. HSBC and Deutsche Bank did not offer any comment to the news agency.
Previous investigations by the US Commodity Futures Trading Commission (CFTC) have failed to uncover any evidence of malpractice in the silver market.
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