LONDON, March 5 Barclays, Deutsche Bank
and three other banks have been accused in a lawsuit
of manipulating the London gold fix, a benchmark used throughout
the $20 trillion market for the metal, Bloomberg reported.
Kevin Maher, a New York resident who says he bought and sold
gold and gold futures and options, sued in Manhattan federal
court on Tuesday, the report said, alleging the five banks
overseeing the century-old benchmark colluded to manipulate it.
According to the report, Maher is seeking to represent a
class of all investors who, from 2004 to now, held or traded
gold and gold derivatives that were priced based on the gold fix
or who held or traded COMEX gold futures or options.
In a statement, Deutsche said it believed the suit was
without merit and that the bank "will vigorously defend against
it". Barclays declined to comment. The other banks involved in
the fix - ScotiaMocatta, Societe Generale and HSBC
- could not immediately be reached for comment.
Gold fixing happens twice a day in a teleconference between
banks. At the start of each fixing, the chairman announces an
opening price to the other members, who relay that to their
customers and, based on orders received from them, instruct
their representatives to declare themselves buyers or sellers at
The price is adjusted up and down until demand and supply
are matched, at which point the price is declared "fixed". The
fixings are used to help determine prices globally.
Regulators including Germany's Bafin are looking more
closely at how banks set benchmarks such as the gold fix after
the Libor rigging scandal exposed widespread interest rate
Maher is seeking unspecified damages on behalf of the class,
In January, Deutsche Bank said it was quitting the process
after withdrawing from the bulk of its commodities business.
South Africa's Standard Bank, now selling a
controlling stake in its markets unit to China's ICBC
, is emerging as a frontrunner to buy Deutsche's
place in the global gold price-setting process, sources familiar
with the matter told Reuters last month.