Until very recently, the price of silver was set by a combination of three of the world’s largest multinational banks—the members of The London Silver Market Fixing, Ltd. The three banks are Deutsche Bank AG (“Deutsche”), HSBC U.S.A. Bank, N.A. (“HSBC”), and The Bank of Nova Scotia-ScotiaMocatta (“Scotiabank”) (collectively the “Fixing Members”).
The name of the process was the “Silver Fix.” The Silver Fix determined the benchmark price of silver worldwide from 1897 until August 14, 2014. The Fixing Members literally fixed the price of silver once per day, every business day, through a secure conference call, at noon, London time. There were no outside observers or regulatory body, and Plaintiffs are aware of no recordings or transcripts ever released. Plaintiffs assert that through this clandestine device, Defendants dictated the price of physical silver and thereby the prices of silver financial instruments such as silver futures and options, the prices of which are directly and proximately caused by, and directly linked to, the price of physical silver, both physical and futures — around the noon Silver Fix, that created a distinct tradable advantage of up to 40 basis points per day for the Fixing Members and other insiders. This advantage persisted “in bull markets, bear markets, and everything in between” defying price trends in the broader market throughout the Class Period.
