In re London Silver Fixing, Ltd.
213 F. Supp. 3d 530
S.D.N.Y.2016Background
- Plaintiffs (buyers/sellers of physical silver and silver derivatives) allege that four banks (Deutsche Bank, HSBC, Bank of Nova Scotia — the "Fixing Members" — and UBS) conspired to manipulate the London Silver Fixing from Jan. 1, 1999 through the class period by suppressing the daily Fix Price, trading on confidential order information, and maintaining supra-competitive spreads.
- The Silver Fixing was a private daily auction among Fixing Members that produced a published benchmark used widely to price and settle physical silver and many silver derivatives.
- Plaintiffs rely on statistical and economic analyses showing recurring downward price "reversions," spikes in volume and volatility around the Fixing, predictive futures trades during the Fixing window, and regulatory findings about related misconduct in FX/precious metals markets.
- This is an MDL action; Plaintiffs filed a Second Consolidated Amended Complaint and Defendants moved to dismiss. Discovery is stayed; DOJ closed its antitrust probe; FINMA and other regulators investigated related conduct.
- The Court dismissed all claims against UBS for failure to plead participation in the Fixing, granted several defenses limited in time, and allowed many claims against the Fixing Members to proceed for a core period (Jan. 1, 2007–Dec. 31, 2013) while dismissing others (e.g., bid‑rigging, unjust enrichment, claims outside specified dates).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Antitrust standing | Plaintiffs suffered concrete losses from sales at artificially depressed Fix-related prices | Defendants: injuries speculative, plaintiffs both bought/sold; not direct purchasers of the Fixing | Court: constitutional and antitrust standing adequately pleaded for at least a subset of plaintiffs (efficient enforcers), but scope/time limited |
| Section 1 price‑fixing conspiracy | Fixing Members colluded to suppress Fix Price; plus factors: anomalous pricing, volume spikes, predictive trades, non‑reactive spreads | Defendants: parallel conduct, market explanations, regulatory findings elsewhere don’t prove silver conspiracy | Court: pleaded plausible conspiracy and plus factors for 2007–2013; claims outside that window dismissed |
| CEA manipulation and manipulative‑device claims | Defendants caused artificial prices, traded on foreknowledge, and used deceptive device post‑Rule 180.1 (after Aug 15, 2011) | Defendants: plaintiffs didn’t transact during artificial periods; Rule 180.1 not retroactive; fraud/ scienter not pleaded | Court: manipulation and CEA claims survive (including manipulative‑device claims for post‑Aug‑15‑2011 sales); pre‑Aug‑15‑2011 Rule 180.1 claims dismissed |
| Claims against UBS and unjust enrichment | UBS participated similarly; unjust enrichment from ill‑gotten gains | Defendants: UBS never participated in the Fixing; no direct benefit; unjust enrichment requires direct relationship | Court: dismissed all claims against UBS; unjust enrichment dismissed as too attenuated |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard for conspiracy claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standards and inferences)
- Gelboim v. Bank of Am. Corp., 823 F.3d 759 (antitrust standing in benchmark‑manipulation context)
- Associated Gen. Contractors v. California State Council of Carpenters, 459 U.S. 519 (antitrust standing framework)
- Socony‑Vacuum Oil Co. v. United States, 310 U.S. 150 (per se illegality of horizontal price fixing)
- Lexmark Int’l, Inc. v. Static Control Components, 134 S. Ct. 1377 (proximate cause / directness in standing analysis)
- Anderson News, L.L.C. v. American Media, Inc., 680 F.3d 162 (conspiracy pleading: need enough factual matter to suggest agreement)
- In re Aluminum Warehousing Antitrust Litig., 833 F.3d 151 (standing for plaintiffs in secondary/affected markets)