Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The Guardian is reporting that a lawsuit was filed this past week by an investor claiming that banks have “unlawfully manipulated” the price of silver and its derivatives in order to “reap large illegitimate profits.” The investor, J. Scott Nicholson, filed the class action suit against HSBC, Deutsche Bank, and the Bank of Nova Scotia. He is hoping to include other investors who have bought silver future contracts since 2007.
“The extreme level of secrecy creates an environment that is ripe for manipulation. Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits,” Nicholson said.
This lawsuit comes on the heels of a similar scandal involving gold price fixing, which led to Barclays being fined $26 million and Deutsche Bank withdrawing its participation in setting gold and silver benchmarks in London beginning on August 14th. Silver prices are set in London once a day via a conference call between the banks.
The scandal broke back in March, when a group of separate lawsuits were filed accusing banks of rigging the daily gold price. The Financial Conduct Authority (FCA) in London ended up fining Barclays for “failing to prevent manipulation of the gold price in London.” Now, due to these scandals, a top European financial expert, Sir Richard Lambert, is expected to be appointed to oversee a government-led investigation into financial markets according to The Guardian.
It remains to be seen what effect these scandals and subsequent lawsuits will have on gold and silver prices. Physical gold closed down slightly today at $1,295.75 an ounce and physical silver closed up a bit at $20.58 an ounce.