Banks investigated for metals market rigging

© Arnd Wiegmann
Switzerland’s competition regulator (COMCO) has begun a probe into seven banks suspected of price fixing in the trade of precious metals.

“The Competition Commission has opened investigation against two Swiss banks, UBS and Julius Baer, as well as against the foreign financial institutions Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui," the watchdog said in a statement on Monday.

The banks are suspected of colluding in the trade of gold, silver, platinum and palladium, according to the regulator.

"We think they could have manipulated the price of these precious metals," the deputy head of COMCO Patric Ducrey told AFP.

This is not the first probe into commodity market manipulation. In February, the US Department of Justice included top ten international banks in its investigation of precious metals trade fixing.

The Swiss regulator FINMA included its metals rigging investigation into another settlement with UBS Group over currency rate manipulation, saying there was a "clear attempt to manipulate fixes in the precious metal market" by the bank. UBS later pled guilty and agreed to pay $545 million in combined fines.

READ MORE: Goldman Sachs, HSBC, BASF sued in first US metals price manipulation case

Last year, four major international banks (Goldman Sachs, HSBC, BASF and Standard Bank) were accused of manipulating platinum and palladium prices for eight years. The banks’ manipulation reportedly cost purchasers millions of dollars.

Until recently, gold, silver, platinum and palladium prices were set by a century-old process where a small number of banks would meet for daily or twice-daily conferences. That process was overhauled last year with the help of the London Bullion Market Association. Now, an electronic, auction-based system serves as a regulatory structure for market prices.