AIS Capital Management has filed a lawsuit against five banks for willingly fixing the London benchmark gold price using unscrupulous practices for their own benefits.
The five banks charged by the US investment-management firm include Barclays, HSBC, Société Générale, Deutsche Bank and Bank of Nova Scotia.
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In its lawsuit, AIS Capital accused the banks for colluding and collusively manipulating prices of gold and gold derivatives contracts, reported The Wall Street Journal.
The case was filed by the law firm Hausfeld on behalf of AIS Capital Management, which alleged that these banks started fixing the gold rate since 1 January 2004 and there are still using the dishonest practices.
Deutsche Bank spokesman told the publication, "We believe this suit is without merit and will vigorously defend against it."
A spokesman for Bank of Nova Scotia commented, "Matters relating to the gold fixing business are now before the courts. We deny the claims made against Scotiabank and will defend the bank on this matter."
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By GlobalDataConnecticut-based AIS Capital runs three funds investing in gold bullion and gold futures and manages US$400 million on behalf of clients including retirement plans, endowments and large brokerage firms, according to the Financial Times.
The hedge fund company saw its gold fund suffer losses of 67% last year.
