By Nate Raymond
NEW YORK Oct 18 Deutsche Bank AG has
agreed to pay $38 million to settle U.S. litigation over
allegations it illegally conspired with other banks to fix
silver prices at the expense of investors, according to court
papers filed on Monday.
The settlement, disclosed in papers filed in Manhattan
federal court, came in one of many recent lawsuits in which
investors have accused banks of conspiring to rig rates and
prices in financial and commodities markets.
The settlement had been expected since April, though terms
had yet to be disclosed. In court papers, lawyers for the
investors say the deal will likely be an "ice breaker" that will
serve as a catalyst for other banks to settle.
Vincent Briganti, a lawyer for the investors, said the deal
provides "substantial monetary compensation plus cooperation
from Deutsche Bank in the continued prosecution of this
important case against the non-settling defendants."
The settlement is subject to court approval. A spokeswoman
for the German bank declined to comment.
In the litigation, investors claimed Deutsche Bank, HSBC
Holdings Plc and Bank of Nova Scotia
(ScotiaBank) rigged silver prices through a secret daily meeting
called the Silver Fix, and accused UBS AG of exploiting
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 annualised, the investors said.
Deutsche Bank put its seat on the silver price setting
process up for sale in January 2014, and the 117-year-old
practice was disbanded altogether in August that year after the
German bank failed to attract a buyer.
The auction-style process, which occurred once daily for
silver and twice for gold through a conference call in London,
was used by industry and central banks to trade the metal and
CME Group and Thomson Reuters now operate
an electronic benchmark for silver prices.
The end of the silver fix was followed by the collapse of
similar benchmarks for gold, platinum and palladium, in a wave
of reform for precious metals pricing procedures sparked by
greater regulatory scrutiny.
Earlier this month, U.S. District Judge Valerie Caproni
ruled the investors had sufficiently, "albeit barely," alleged
that Deutsche Bank, HSBC and ScotiaBank violated U.S. antitrust
law by conspiring to depress the Silver Fix from 2007 to 2013.
But the judge dismissed UBS from the case, saying there was
nothing showing it manipulated prices, even if it benefited from
Caproni at that time said the investors could amend their
complaint, including against UBS, and a lawyer for the investors
has said they planned to do so.
The case is In re: London Silver Fixing Ltd Antitrust
Litigation, U.S. District Court, Southern District of New York,
(Additional reporting by Jan Harvey; Editing by Matthew Lewis
and Louise Heavens)