ZeroHedge | Tyler Durden
Back in April, precious metal traders felt vindicated when Deutsche Bank agreed to settle a July 2014 lawsuit alleging precious metal manipulation by a consortium of banks.
As a reminder, In July 2014 we reported that a group of silver bullion banks including Deutsche Bank, Bank of Nova Scotia and HSBC (later UBS was also added to the defendants) were accused of manipulating prices in the multi-billion dollar market. The lawsuit, which was originally filed in a New York district court by veteran litigator J. Scott Nicholson, a resident of Washington DC, alleged that the banks, which oversee the century-old silver fix manipulated the physical and COMEX futures market since January 2007. The lawsuit subsequently received class-action status. It was the first case to target the silver fix.
The alleged conspiracy started by 1999, suppressed prices on roughly $30 billion of silver and silver financial instruments traded each year, and enabled the banks to pocket returns that could top 100 percent annualized, the plaintiffs said.
Many expected that this case would never go anywhere and that the defendant banks would stonewall indefinitely: after all their legal budgets were far greater than the plaintiffs.
Which is why so many were surprised to learn six montsh ago that not only had this lawsuit against precious metals manipulation not been swept away, but that the lead defendant, troubled German bank Deutsche Bank agreed to settle the litigation over allegations it illegally conspired with Bank of Nova Scotia and HSBC Holdings Plc to fix silver prices at the expense of investors. Terms of the settlement were not disclosed, but the accord will include a monetary payment by the German bank.
As we reported, at the time, it was clear that “there would have been neither a settlement nor a payment if the banks had done nothing wrong.” As Reuters further noted, Deutsche Bank has signed a binding settlement term sheet, and is negotiating a formal settlement agreement to be submitted for approval by U.S. District Judge Valerie Caproni, who oversees the litigation. A Deutsche Bank spokeswoman declined to comment. Lawyers for the investors did not immediately respond to requests for comment.
What was also notable is that in a curious twist, the settlement letter revealed a striking development, namely that the former members of the manipulation cartel had turned on each other. To wit:
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