Gold pricing lawsuit advances

Scotia Bank, others must reveal emails

TORONTO Large global banks targeted in a lawsuit alleging price fixing in the gold market, including Canada’s Bank of Nova Scotia, will have to turn over internal emails and other correspondence as the case moves ahead, says Daniel Brockett, the New York lawyer who is spearheading the U.S. lawsuit.

“They have to produce all the relevant emails and chat room instant messages, however they communicated with each other,” Brockett said in an interview after Valerie Caproni, a judge in the U.S. District Court for the Southern District of New York, ruled this past week that a portion of the case can move forward.

Caproni reduced the class period to six years ending in 2012, and dismissed a claim of unjust enrichment, but Brockett said the “core” claims were maintained in the ruling that rejected the banks’ motion to have the case dismissed.

“The ruling is a major victory for the plaintiffs because it upholds the core anti-trust claim against the five fixing banks, and the statutory commodity manipulation claim against the five fixing banks,” said Brockett, a senior litigation partner at Quinn Emanuel Urquhart & Sullivan LLP.

Investors behind the lawsuit allege Scotia, Barclays PLC, HSBC Holdings PLC, Societe Generale, and Deutsche Bank PLC conspired to manipulate the price of gold through twice daily meetings where the small group of banks convened to set the spot price. None of the allegations have been proven.

The plaintiffs will now seek documents from the banks during a discovery period, which Brockett expects to last between 18 months and two years.

Officials at Scotiabank declined to comment on the judge’s ruling and would not discuss questions regarding the release of any internal correspondence to the plaintiffs.

“We are unable to comment as the mater is still before the courts,” spokesperson Rick Roth said in an email.

Scotiabank became a large player in the gold market in late 1997 when it purchased the precious metals business of Britain’s Standard Chartered Bank.