In re London Silver Fixing, Ltd., Antitrust Litig.
332 F. Supp. 3d 885
S.D. Ill.2018Background
- From 2007–2013 the Silver Fixing (a daily, private, unrecorded auction among several banks) set a market-clearing Fix Price for physical silver; plaintiffs initially alleged the Fixing Banks conspired to suppress that Fix Price.
- Plaintiffs obtained Deutsche Bank trader chat logs (the "Deutsche Bank Cooperation Materials") and amended their complaint to add Non‑Fixing Banks (Barclays, BNP Paribas, Standard Chartered, BAML, UBS), alleging broader schemes: bid‑ask spread fixing, coordinated episodic market manipulation (e.g., "spoofing," "pushing," triggering stop‑losses), and information‑sharing.
- The TAC quotes numerous bilateral and group trader chats suggesting information sharing, coordinated trades, and explicit agreements to quote wider spreads; some regulators (CFTC, DOJ) later brought or settled enforcement actions against certain traders/banks for precious‑metals spoofing.
- Defendants moved to dismiss, arguing the chats do not plausibly tie Non‑Fixing Banks to the Fixing‑Banks’ alleged Fix Price scheme, plaintiffs lack antitrust standing as umbrella purchasers, CEA claims are time‑barred or extraterritorial, and plaintiffs fail to plead actual damages/market manipulation by Non‑Fixing Banks.
- The court held the TAC implausibly alleges a single, overarching conspiracy linking Fixing and Non‑Fixing Banks to suppress the Fix Price, but found the chats do plausibly allege a more limited conspiracy among the Non‑Fixing Banks (and Deutsche Bank) to collude episodically and fix bid‑ask spreads.
- Despite plausibly alleging a Non‑Fixing‑Banks conspiracy, the court dismissed plaintiffs’ Sherman Act claims for lack of antitrust standing (not efficient enforcers) and dismissed all CEA claims for failure to plead actual damages, extraterritoriality as to Barclays/Standard Chartered/BNP, and overall failure to state a CEA manipulation claim; dismissal was with prejudice and leave to amend denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TAC plausibly alleges an overarching conspiracy linking Fixing Banks and Non‑Fixing Banks to suppress the Silver Fix | Chats + econometrics and DB materials show coordinated conduct and plus factors supporting a single comprehensive conspiracy | Chats show episodic/bilateral conduct; no direct evidence linking Non‑Fixing Banks to Fix Price suppression; implausible they’d be included | Not plausible — overarching Fixing–Non‑Fixing conspiracy dismissed |
| Whether TAC plausibly alleges a conspiracy among Non‑Fixing Banks to manipulate silver markets or fix bid‑ask spreads | Chats are direct evidence of info‑sharing, coordination, and explicit spread agreements; plus regulatory findings | Chats are opportunistic or ex post; bilateral only; insufficient to show multilateral conspiracy | Plausibly alleged — conspiracy among Non‑Fixing Banks and Deutsche Bank to collude episodically and fix bid‑ask spreads survives pleading stage |
| Whether plaintiffs have antitrust standing (efficient‑enforcer) to pursue Sherman Act claims against Non‑Fixing Banks | Class includes OTC/exchange participants who were harmed by market manipulation; regulators’ actions support common injury | Plaintiffs are umbrella purchasers with indirect, attenuated, speculative injuries; class definition risks disproportionate liability and apportionment problems | Plaintiffs are not efficient enforcers; Sherman Act claims against Non‑Fixing Banks dismissed |
| Whether CEA claims against Non‑Fixing Banks are timely, domestic, and plead manipulation/actual damages | Discovery and regulatory developments later; trades on COMEX/CBOT are domestic so CEA applies; chats + regulator actions show manipulation and damages | Some public notices predate TAC (argue time‑barred); many alleged acts are foreign or not tied to plaintiffs’ domestic trades (extraterritoriality); TAC fails to show artificial prices caused plaintiffs’ actual damages | CEA claims dismissed: (1) not time‑barred at pleading stage; (2) extraterritorial as to Barclays/Standard Chartered/BNP; (3) failure to plead actual damages/causation for episodic manipulation — all CEA claims dismissed |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual content permitting plausible inference of liability)
- Associated Gen. Contractors v. California State Council of Carpenters, 459 U.S. 519 (1983) (antitrust standing/efficient‑enforcer framework)
- Gelboim v. Bank of Am. Corp., 823 F.3d 759 (2d Cir. 2016) (antitrust standing and pleading conspiracy by circumstantial evidence)
- In re London Silver Fixing, Ltd., Antitrust Litig., 213 F. Supp. 3d 530 (S.D.N.Y. 2016) (prior Silver I ruling sustaining claims as to Fixing Banks)
- In re Foreign Exch. Benchmark Rates Antitrust Litig., 74 F. Supp. 3d 581 (S.D.N.Y. 2015) (use of chat messages as evidence of coordinated benchmark manipulation)
- Sonterra Capital Master Fund Ltd. v. Credit Suisse Grp. AG, 277 F. Supp. 3d 521 (S.D.N.Y. 2017) (rejecting inference of an overarching conspiracy where separate manipulation theories lack connection)
- In re Zinc Antitrust Litig., 155 F. Supp. 3d 337 (S.D.N.Y. 2016) (analyzing plausibility of multiple conspiracies vs single scheme)