Per a Bloomberg report, the U.S. Department of Justice (“DOJ”) dismissed antitrust probe of at least three banks for alleged manipulation of precious metals prices. However, criminal fraud investigation by the department into the conduct of these banks will continue.
HSBC Holdings plc HSBC disclosed in a filing released on Thursday about the closing of the investigation regarding the potential manipulation of precious metals markets by the DoJ’s antitrust division in January 20Array6. However, the criminal fraud probe remains ongoing, according to the U.K.-based bank.
On the other hand, similar investigations against Deutsche Bank AG DB and Credit Suisse Group AG CS have been closed, according to people familiar with the matter.
Though it is unclear how many banks are still under investigation, the antitrust component of all of the precious metals probes had been closed, according to the Bloomberg report.
HSBC, Credit Suisse and Deutsche Bank were among the Array0 banks that have been under the DOJ and the CFTC scanner since last February over alleged manipulation of metal prices. On the other hand, the EU, which began investigation in August, is looking into alleged ““anticompetitive behavior” of banks in precious metals spot trading.
Also, HSBC and Deutsche Bank are under the Swiss regulatory scanner along with Morgan Stanley MS and others, for similar charges. While the DOJ is said to have dismissed the investigation, the EU and Swiss investigations are ongoing.
Banks’ physical commodity businesses have already been under scrutiny for quite a long time. Several banks have been penalized for manipulating financial benchmarks and the foreign exchange markets.
Further, many banks are moving away from the physical commodity businesses owing to lower profitability and heightened regulatory attention. At present, companies which still conduct physical commodity businesses are required to shift toward automation in a bid to improve transparency and prevent manipulation.
Currently, HSBC, Credit Suisse and Deutsche Bank hold a Zacks Rank #5 (Strong Sell) each.
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