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Banks Accused of Manipulating the Benchmark
According to a filing with a U.S. federal court in New York, five banks involved in setting the London benchmark gold price have been accused in a lawsuit of price manipulation.
The banks which oversee the benchmark – Societe Generale (SOGN.PA), Deutsche Bank (DBKGn.DE), Barclays (BARC.L), Bank of Nova Scotia (BNS.TO) and HSBC (HSBA.L) are alleged to have manipulated the benchmark according to Kevin Maher, who is bringing the suit as a class action, on behalf of himself and other investors who held or traded gold and gold derivatives that were settled based on the gold fix, or who held or traded COMEX gold futures or options, from 2004 to now. Kevin Maher, according to Bloomberg News, cited press reports in his complaint, showing what they said were unusual pricing patterns connected to the gold fix.
Business Insider reported that he alleged “the five banks overseeing the century-old benchmark colluded to manipulate it.” Deutsche Bank said in a statement that it is believed that the suit was without merit and that the bank “will vigorously defend against it,” according to Reuters. Kevin Maher is seeking unspecified damages on behalf of the class and Bloomberg News reports that damages may be tripled under the U.S. antitrust law. Both HSBC and Barclays declined to comment.
Benchmarking is the process of comparing one’s business processes and performance metrics to industry bests or best practices from other industries. Dimensions typically measured are quality, time and cost. This process is used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice companies’ processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.
Image credit: www.businessweek.comBanks Accused of Manipulating the Benchmark by Jaan