Goldman Sachs Settles Antitrust Lawsuit

By Jonathan Stempel

NEW YORK (Reuters) – Goldman Sachs, German industrial company BASF, and two other banks have agreed to pay $20 million to settle a nearly decade-old antitrust lawsuit that accused them of conspiring to suppress platinum and palladium prices.

The preliminary settlement of the proposed class action was filed on Friday night and approved by U.S. District Judge Gregory Woods in Manhattan, as indicated by court records on Monday.

The defendants also include HSBC and London-based ICBC Standard Bank. All four defendants denied any wrongdoing in agreeing to settle the case.

Platinum and palladium are crucial in catalytic converters for reducing vehicle emissions, as well as in dentistry and jewelry production.

Purchasers of platinum, palladium, and their futures contracts accused the defendants of conspiring between January 1, 2008, and November 30, 2014, to rig the twice-daily platinum and palladium “fixings”. This was allegedly done by sharing customer data, front-running expected price movements, and placing deceptive “spoof” orders.

The purchasers argued that the lower metals prices decreased the cost banks and clients paid for platinum and palladium, while enabling banks to avoid losses on their “short” positions in futures markets.

Lawyers representing the purchasers have described the settlement as an “excellent” outcome that is fair, reasonable, and adequate. They intend to seek up to one-third of the settlement, approximately $6.67 million, in legal fees, plus up to $600,000 in expenses.

Final approval of the settlement is anticipated in January.

This lawsuit is one of several against major banks in Manhattan, alleging collusion across various markets including interest rate benchmarks, U.S. Treasuries, currencies, and commodities.

The case is referenced as In re: Platinum and Palladium Antitrust Litigation, U.S. District Court, Southern District of New York, No. 14-09391.