Silver as an investment

Class action suit may be just the start of metal warehouse owners’ legal woes

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

mineweb.com / By David Ingram / Monday , 05 Aug 2013 

A U.S. class action alleging an illegal agreement to inflate aluminium prices may be just the start of aluminium buyers’ legal assault against warehouse owners such as Goldman Sachs Group Inc, lawyers with antitrust expertise said on Sunday.

Goldman, other warehouse owners and the London Metal Exchange were named as defendants in the lawsuit filed last week alleging anticompetitive behaviour.

Goldman and LME owner HKEx said the suit was meritless.

The suit fits a pattern of ‘follow-on’ class actions typically filed after the U.S. Justice Department or other government authority opens an investigation, lawyers said.

“Antitrust exposure is not limited merely to government enforcement but also to private enforcement,” said Daniel Sokol, who writes about competition and antitrust law at the University of Florida.

The exposure is significant, Sokol added, because damages for price-fixing are tripled under U.S. law if a defendant is found liable.

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.

Criticism of banks that own commodity assets and trade raw materials has ratcheted up after the U.S. Department of Justice started what sources said was a preliminary probe into the metals warehousing industry.

READ MORE

Thanks to BrotherJohnF