Bloomberg Businessweek reported over the weekend that Deutsche Bank AG (NYSE:DB), HSBC Holdings plc (NYSE:HSBC) and the Bank of Nova Scotia (TSX:BNS) have been accused in a lawsuit of rigging the silver price.
Representatives from Deutsche Bank and HSCB declined to comment, but Diane Flanagan of the Bank of Nova Scotia said, “[w]e intend to vigorously defend ourselves against this suit.”
As quoted in the market news:
The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.
‘The extreme level of secrecy creates an environment that is ripe for manipulation,’ according to the complaint. ‘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.’