Goldman Sachs Group Inc. and HSBC Holdings Plc conspired for eight years to manipulate platinum and palladium prices, according to a class-action lawsuit filed in New York.
Standard Bank Group Ltd. and a metals unit of BASF SE, the world’s largest chemical company, were also sued, Bloomberg News reported, citing the complaint.
The four companies used insider information about client purchases and sale orders to profit from price movements for the two precious metals, the report said.
Spokespersons for the companies did not comment.
The potential damages in the case may range from tens of millions to hundreds of millions of dollars, based on the size of the markets for platinum and palladium, Gregory Asciolla, the lawyer for the plaintiffs, was quoted as saying.
The metals are commonly used for making jewelry and catalytic converters, which control harmful emissions from vehicles, according to the complaint.
Goldman Sachs, HSBC, Standard Bank and BASF are the only participants in twice-daily conference calls to set global price benchmarks for the London Platinum and Palladium Market, an off-exchange trading center whose quotes affect related derivative products.
The quoted prices are used worldwide by miners, refiners, wholesalers, jewelers and investors.
The companies trade heavily in platinum and palladium and use the conference call to boost their own profit, according to the complaint.
“This unlawful behavior allowed defendants to reap substantial profits, while non-insiders, which include plaintiffs and members of the class, were injured,” according to a filing by lawyers for New York-based Modern Settings LLC, a jeweler that buys precious metals and derivatives set on their prices.
Modern Settings needs a judge’s approval before it can represent other buyers of the metals, the report said.
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