JSE-listed Standard Bank, along with US-based banking firms Goldman Sachs, HSBC and metals unit of BASF SE were sued in New York last week over claims they conspired for eight years to manipulate prices for the precious metals platinum and palladium.

This is the first such class-action lawsuit in the US according to the lawyer of the plaintiff – Modern Settings LLC –  a jeweller based in New York, US.

According to reports, the four companies colluded since 2007 to manipulate the twice-daily price ‘fixes’ for the metals, said lawyers for Modern Settings LLC.

‘Expense of others’

The alleged price rigging allowed the four to enrich themselves at the expense of other market participants, the lawsuit said.

The four companies allegedly used inside information about client purchases and sale orders to profit from price movements for the metals used in products ranging from jewellery to cars, according to the suit filed in New York.

Direction of prices

Modern Settings LLC claims the companies “were privy to and shared confidential, non-public information about client purchase and sale orders that allowed them to glean information about the direction” of prices.

The potential damages in the case may range from tens of millions to hundreds of millions of dollars, based on the size of the markets for platinum and palladium, Gregory Asciolla, the lawyer for the plaintiffs, told media.

Platinum uses

The biggest uses of the metals are for jewellery and producing catalytic converters, which curb harmful emissions from vehicles, according to the complaint, reported Fin24.

Carmakers’ use of platinum will climb 7.9% to a six- year high of 3.39 million ounces this year, and there will be “broad-based growth” next year, auto-catalysts producer Johnson Matthey Plc estimates.