(Corrects year in quote from Goldman spokesman to 2006)
* Lawsuit alleges anticompetitive, monopolistic behaviour
* Goldman offered immediate access to metal on Wednesday
By Veronica Brown and Josephine Mason
LONDON/NEW YORK, Aug 4 The London Metal Exchange
and Goldman Sachs Group Inc. have been named as
co-defendants in a U.S. class-action lawsuit alleging
anticompetitive behaviour in aluminium warehousing, Hong Kong
Exchanges and Clearing Limited (HKEx) said.
Goldman on Wednesday tried to diffuse years of frustration
over long waiting times and inflated prices at metals warehouses
across the world, by offering immediate access to aluminium for
end users holding metal at its Metro warehouses.
Criticism of banks that own commodity assets and trade raw
materials has ratcheted up in recent weeks, with the U.S.
Department of Justice starting a preliminary probe into the
metals warehousing industry, sources said.
Britain's financial watchdog is also investigating the LME's
The lawsuit alleges "anticompetitive and monopolistic
behaviour in the warehousing market in connection with aluminium
prices", LME owner HKEx said in a statement on Sunday.
The lead plaintiff in the lawsuit, filed on Aug. 1 in the
U.S. District Court for the Eastern District of Michigan, is
Superior Extrusion, Inc - an end user of aluminium.
"LME management's initial assessment is that the suit is
without merit and LME will contest it vigorously," HKEx said.
Customers and U.S. lawmakers have accused Goldman and other
warehouse owners of artificially inflating waiting times to
boost rents for warehouse owners and lift metal prices.
"We believe this suit is without merit and we intend to
vigorously contest it," a Goldman Sachs spokesman said. "I would
also note that aluminium prices are down 40 percent from their
peak in 2006," he said.
Goldman President Gary Cohn told CNBC television on
Wednesday that no consumers had stepped forward to take up the
London Metal Exchange aluminium for three months delivery
closed on Friday at $1,809 per tonne.
Warehouse owners and outgoing LME CEO Martin Abbott have
said complaints over long lines are unjustified, arguing there
is no shortage of metal.
(Editing by Louise Ireland)