Glencore, JPM sued in U.S. as warehousing legal battle ramps up
SINGAPORE (Reuters) - Glencore Xstrata (GLEN.L) and JPMorgan Chase & Co (JPM.N) face a U.S. lawsuit, along with the London Metal Exchange, alleging they artificially inflated aluminum prices, in the second legal challenge related to metal warehousing in a week.
The suit, which also names Goldman Sachs (GS.N) and subsidiaries of both Goldman and JP Morgan, accuses the firms of engaging in anti-trust and racketeering practices.
The latest case, filed by Florida-based aluminum user Master Screens and an individual plaintiff, expands the geography and number of companies being sued in the unfolding legal battle over warehousing.
Goldman Sachs and JPMorgan dismissed the suit.
"We believe this suit is without merit and we intend to vigorously contest it. We also note that aluminum prices are down 40 percent from their peak in 2006," a Goldman Sachs spokesman said.
"There are no queues at our warehouses. We believe this suit has no merit," a JPMorgan spokesman said.
Hong Kong Exchanges and Clearing Limited (0388.HK), owner of the LME, declined to comment.
A Glencore spokesman declined to comment.
U.S. regulators are scrutinizing ownership of commodity storage facilities by major U.S. banks.
Last week, Goldman and the LME were named as defendants in a separate Detroit lawsuit.
The Florida lawsuit alleges "manipulation of the aluminum market through supply price fixing," among other practices.
The lead plaintiff in the lawsuit, which is seeking class action status and was filed on August 6 in the U.S. District Court for the Northern District of Florida, is Master Screens Inc. and Daniel Price Bart, described in the filing as "a purchaser of beverages sold in aluminum cans."