328 F. Supp. 3d 217
S.D. Ill.2018Background
- Plaintiffs alleged a multi-year (2004–2012) conspiracy to suppress the afternoon London "PM Fixing" gold benchmark conducted by London Gold Market Fixing Ltd. (LGMF) and five Fixing Banks; UBS was accused of participating despite not being a panel member.
- Plaintiffs asserted Sherman Act and Commodity Exchange Act (CEA) claims, plus unjust enrichment, on behalf of sellers of physical gold and certain gold derivatives.
- Earlier decision (Gold I) permitted claims against the Fixing Banks but dismissed UBS; plaintiffs filed a Third Amended Complaint (TAC) adding UBS-specific statistical analyses and 16 trader chat fragments between a UBS trader and a Deutsche Bank trader.
- Chats showed inter-firm coordination and some references to "the fix," but occurred overnight in Singapore time and contained no direct evidence of an agreement between UBS and the Fixing Banks to suppress the PM Fix.
- The TAC’s new statistics purported to show UBS quoted below-market prices near the PM Fixing and more frequently in the bottom price percentiles, but analyses mainly lumped defendants together or showed patterns inconsistent with foreknowledge of the Fix Price.
- The Court concluded the TAC failed to plausibly link UBS to a fix-suppression conspiracy and granted UBS’s motion to dismiss with prejudice; leave to further amend was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TAC plausibly alleges UBS joined a conspiracy to suppress the PM Fix Price under §1 of Sherman Act | Chats + statistical analyses show inter-firm communications, coordinated trading, and UBS-specific underpricing around PM Fix, supporting inference of conspiracy | Fix was controlled by five Fixing Banks in a private call; UBS had no need or obvious role; chats are not direct evidence and occur at irrelevant times; statistics lump defendants or are inconsistent with foreknowledge | Dismissed: TAC fails to plausibly allege UBS joined fix-suppression conspiracy |
| Whether plaintiffs stated manipulation claims under the CEA against UBS | Same factual theory as Sherman Act; manipulation shown by ability, artificial price, causation, intent | Same defenses as to Sherman Act; lack of particularized allegations; statistics and chats insufficient; additional procedural defenses raised | Dismissed: CEA claims fail for same reasons as Sherman Act claims |
| Whether unjust enrichment claim against UBS survives | UBS unjustly profited from manipulation | No plausible predicate misconduct tying UBS to fix; claim depends on dismissed substantive counts | Dismissed |
| Whether leave to amend should be granted | (Implicit) Plaintiffs could add facts if available | Plaintiffs already amended thrice and offer no proposed further amendment; key gaps in TAC | Denied: leave to amend denied; dismissal with prejudice |
Key Cases Cited
- United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (per se illegality of horizontal price-fixing)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for conspiracy pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading requirements and legal conclusions)
- Gelboim v. Bank of Am. Corp., 823 F.3d 759 (plus-factor framework for circumstantial antitrust conspiracy claims)
- Mayor & City Council of Baltimore v. Citigroup, Inc., 709 F.3d 129 (direct and circumstantial evidence standards for antitrust conspiracy)
- Anderson News, L.L.C. v. American Media, Inc., 680 F.3d 162 (antitrust pleading standard for concerted action)
- In re Amaranth Nat. Gas Commodities Litig., 730 F.3d 170 (elements of manipulation claim under the CEA)