In re Commodity Exchange Inc. Gold Futures and Options Antitrust Litigation (Markun v. Bank of Nova Scotia)

Updated: February 08, 2017

Status: Ongoing Case

Labaton Sucharow serves as class counsel in a class action against six of the world's largest gold dealers for their alleged manipulation of key benchmarks for the global gold market, known as the London Fixings. A second Consolidated Amended Complaint was filed on March 16, 2015. In October 2016, the court largely denied the defendants' motions to dismiss. The plaintiffs recently filed a third amended complaint. In December 2016, Defendant Deutsche Bank settled for $60 million, and plaintiffs filed a motion for preliminary approval.

The plaintiffs allege that the defendants manipulated the price of gold by sharing confidential customer orders to their proprietary trading desks and preferred clients, which allowed them to trade on non-public information. These benchmarks affect the prices of gold and gold-based financial products, including exchange-traded gold futures and gold options. Thus, the defendants' alleged manipulation affected potentially tens of thousands of gold and gold-based transactions. The plaintiffs alleges that the defendants' misconduct began at least as early as January 1, 2004 and continued until June 30, 2013.

Labaton Sucharow's investigation into the gold market continues. If you would like to know more or believe that you have been injured by manipulation of the gold market, please contact Gregory Asciolla.

The case is In re Commodity Exchange Inc., Gold Futures and Options Antitrust Litigation, No. 14-md-2548 (S.D.N.Y.). The defendants include the world's largest gold dealers, Bank of Nova Scotia, Barclays, Deutsche Bank, HSBC, and Société Générale.

Every day at 10:30 a.m. and 3:00 p.m. London Time, defendants Bank of Nova Scotia, Barclays, Deutsche Bank, HSBC, and Société Générale have a teleconference in which they set the price of gold for the day. Various studies have confirmed that information discussed during the London Fixing calls was being disseminated to insiders and other major dealers in the gold market, including defendant UBS, enabling them to take advantage of market moving information before anyone else could do so. One study found that between 2004 and 2013 there were anomalous downward spikes in the price of gold during the 3:00 p.m. London Fixing calls. In particular, that study found that in 2010 these downward spikes in price occurred 92 percent of the time. These studies suggest that the defendants and others were using the London Fixings to manipulate the gold market.

Regulators in the United States and Europe have begun investigations into the gold market and the process by which the London Fixings are set. The U.S. Department of Justice, Commodity Futures Trading Commission, and the UK Financial Conduct Authority have opened inquiries into the defendants' participation in the gold price-setting process. German regulator BaFin conducted inspections of Deutsche Bank's offices and on-site interviews of Deutsche Bank employees in connection with its investigation.