Banks and BASF to Pay $20M in Platinum Price Fixing Settlement

Goldman Sachs, BASF, HSBC, and ICBC Standard Bank have agreed to a $20 million settlement to resolve a long-standing platinum price-fixing antitrust lawsuit. The settlement addresses allegations that the companies engaged in price manipulation of platinum and palladium, two crucial metals used in various industries.

The settlement, which was preliminarily approved by U.S. District Judge Gregory Woods in Manhattan, was filed late on Friday, according to court documents reviewed on Monday. The platinum price-fixing lawsuit accused the four defendants of conspiring from January 1, 2008, to November 30, 2014, to manipulate the prices of platinum and palladium. This alleged manipulation included sharing confidential customer data, front-running anticipated price changes, and placing deceptive “spoof” orders.

Platinum and palladium, both integral to the production of catalytic converters for reducing vehicle emissions, as well as in dentistry and jewelry, were reportedly subjected to price rigging that favored the banks’ financial interests. The plaintiffs, consisting of purchasers of these metals and related futures contracts, argued that this collusion artificially suppressed prices, reducing costs for the banks and their clients, and helped the institutions avoid losses on their futures positions.

Lawyers representing the plaintiffs have lauded the settlement as a fair and favorable resolution. They intend to request up to one-third of the settlement amount, or approximately $6.67 million, in legal fees, in addition to up to $600,000 for expenses. Final approval of the settlement is anticipated to occur in January.

This case is part of a broader trend of litigation in the Manhattan court, where major banks have faced accusations of colluding in various markets, including interest rate benchmarks, U.S. Treasuries, currencies, and commodities. The case is officially titled In re: Platinum and Palladium Antitrust Litigation, U.S. District Court, Southern District of New York, No. 14-09391.

Per Reuters, all defendants have denied any wrongdoing while agreeing to settle the case.

Source: Reuters