Leading Banks Accused of Fixing Silver Prices
Deutsche Bank, HSBC and the Bank of Nova Scotia have all been accused of attempting to fix the price of silver in a lawsuit filed in the US. The plaintiff is claiming that the banks, which set the price of silver each day, have been abusing their position in the market.
So far there has been no comment from Deutsche Bank or HSBC but the Bank of Nova Scotia said that it would “vigorously defend” itself.
In the filing against the banks, investor Scott Nicholson from Washington said, “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.”
The month of June saw the price of silver steadily rise until it reached a three month high in early July of 21.5 $/oz. Nonetheless, while silver is projected to continue rising and reach new highs in 2015, it is still significantly lower than in September 2013 and even February of this year.
However, just last September the US Commodity Futures Trading Commission said that it found no evidence of wrongdoing in the course of a five-year investigation into the silver market. Furthermore, previous investigations by the US regulator found no evidence of misconduct.
Each day the price of gold and silver are fixed by a small number of banks during a conference call to allow investors to buy and sell at a single, quoted price.