“Wall Street Banks Get Rid of Aluminum Price Fixing Suits” – Nasdaq, 2 September 2014

In 2013, a case was brought against Goldman Sachs, JPMorgan, Glencore PLC, the London Metal Exchange (LME), et al, accusing the banks and LME of creating bottlenecks in their aluminum warehouses in May 2009, causing metal prices to skyrocket for the accused’s gain.

More waiting time in the warehouses meant that the banks could raise the cost of the lease payments, which established a dearth in aluminum availability and forcing aluminum prices to inflate. Major industries, like the beverage can industry and the automobile industry, were impacted.

However, the presiding judge dismissed the antitrust lawsuit. The judge cited that the complaints didn’t show that the defendants were working together to increase prices. The judge’s verdict disallows the plaintiffs who are commercial end-users and consumer end-users to re-appeal their cases; ‘first-level’ aluminum purchasers, on the other hand, are permitted to re-appeal. Since LME is viewed as part of the UK government, it was exempt from the suit due to the Foreign Sovereign Immunities Act.

The Wall Street banks’ metal businesses will continue to be surveilled by regulatory commissions such as the US Department of Justice and Commodity Futures Trading Commission.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

September 5, 2014

Phinix LLC

Copyright 2014. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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