Goldman Sachs, JPMorgan Sued by Zinc Buyer Over WarehousingBob Van Voris
Goldman Sachs Group Inc., JPMorgan Chase & Co., Glencore PLC and the London Metal Exchange were sued by a company that claimed they conspired to restrict zinc supplies and drive up prices.
Duncan Galvanizing Corp. alleged that in 2010 Goldman Sachs, JPMorgan and Glencore each acquired one of the world’s three biggest metals warehouse operators, giving them control over the London Metals Exchange, where 90 percent of zinc metals futures are traded, according to a complaint filed today in Manhattan federal court.
Duncan, based in Everett, Massachusetts, provides protective coatings for steel. It claims the defendants conspired to drive up prices by artificially limiting zinc supplies. Duncan is seeking to represent a class of purchasers of LME-grade zinc for physical delivery in the U.S., from May 24, 2010, to the present.
Michael DuVally, a spokesman for New York-based Goldman Sachs, said the firm intends to contest the lawsuit. Brian Marchiony, a spokesman for New York based JPMorgan Chase, and Charles Watenphul, a spokesman for Glencore, based in Baar, Switzerland, both declined to comment. Miriam Heywood, a spokeswoman for the London Metal Exchange, didn’t immediately respond to an e-mail sent after regular business hours.
The Manhattan courthouse where the zinc suit is filed has become a hub of commodities price-fixing claims in recent months. Suits have been filed over aluminum warehousing and oil futures. U.S. District Judge Valerie Caproni is overseeing 24 suits claiming manipulation of the benchmark used to set prices in the $18 trillion global gold market.
The zinc suit seeks unspecified damages, which may be tripled under U.S. antitrust law.
The case is Duncan Galvanizing Corp. v. The London Metal Exchange Ltd., 14-cv-03728, U.S. District Court, Southern District of New York (Manhattan).