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Precious Metals Manipulation Revisited: Banks Facing Scrutiny By DoJ

Amid investigations and fines levied for rigging markets, major global banks have felt a little pressure on their bottom line. The investigations are not stopping. Despite the fact that European regulators dropped a precious metals manipulation probe, US officials have announced their investigation of no fewer than 10 major banks for the possible rigging of the precious metals markets.

Department of Justice antitrust division prosecutors have kicked off an investigation into the price-setting process for gold, silver, platinum and palladium, which takes place in London, and has recently been changed, as GoldSilverBitcoin covered here. The Commodity Futures Trading Commission has also opened a civil investigation into the old process.

According to Wall Street Journal, the banks are HSBC Holdings Plc, Bank of Nova Scotia, Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, JPMorgan Chase & Co, Societe Generale, Standard Bank Group Ltd and UBS Group AG.

Formal requests have been made for information. The CFTC subpoenaed HSBC Holdings PLC regarding precious-metals trading, the banks disclosed in its annual report, released Monday.

According to the bank, the Justice Department has asked about documents relating to the antitrust investigation which took place in November.  German regulator Bafin looked into the scandal, saying at the time that the potential precious metals manipulation case could be worse than Libor.

The way in which precious metals prices are being set has recently changed. GoldSilverBitcoin went into considerable detail about this in a prior post.  We wrote:

Ruth Crowell is modernizing the precious-metals industry. She oversaw the update of the silver fix, which had been around since 1897. Shortly thereafter, she was on to changing the way the world sets the gold price, which had been done the same way for 95 years. The 34-year-old American, who had spent seven years at the London Bullion Market Association after coming on as a temp worker, has become the international trade group’s first female chief executive.

Precious metals markets are seemingly routine investigated for manipulation. The CFTC, not too long ago, investigated manipulation in the silver market. 

It is likely the results of this media blitz will be comparable to the others – a certain fizzling away.

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