US Department Of Justice Investigating Banks Over Precious Metals Manipulation

US officials announced they were investigating no less than 10 major banks for possibly rigging the precious-metals markets, despite the fact that European regulators dropped such a probe after finding no such evidence.

Department of Justice prosecutors, specifically agents from the antitrust division, are looking into the price-setting process for not only gold, but also silver, platinum and palladium in London. All throughout, the Commodity Futures Trading Commission has opened a civil investigation, according to sources familiar with the matter.

The agencies have indeed made formal requests for information, like a subpoena from the CFTC to HSBC Holdings PLC related to precious-metals trading, the bank said in its annual report Monday.

HSBC stated the Justice Department requested documents related to the antitrust investigation in November. With the probes “at an early stage,” according to the bank, it is cooperating with the US regulators.

The precious-metals probes are the latest example of regulatory scrutiny being brought on the biggest financial institutions. Up until last year prices for gold, silver, platinum and palladium were set with decades-old practices of once-or twice-a-day conferences calls between a tiny group of banks. Since then, the process for setting each of the prices “fixes” has since been overhauled.