Glencore, JPMorgan sued over aluminum prices
Glencore Xstrata and JPMorgan Chase & Co face a U.S. lawsuit alleging they artificially inflated aluminum prices, the second legal challenge related to metal warehousing in a week.
The suit, filed in a district court in Florida, also names Goldman Sachs, the London Metal Exchange (LME) and subsidiaries of both JPMorgan and Goldman and accuses the companies of antitrust practices and racketeering.
Frustration over long waiting times and inflated prices at metals warehouses across the world has led to growing criticism of banks that own commodity assets and trade raw materials.
U.S. regulators are scrutinising ownership of commodity storage facilities by major U.S. banks.
Last week, Goldman and the LME were named as defendants in a separate Detroit lawsuit.
The latest case, filed by Florida-based aluminum user Master Screens and an individual plaintiff, expands the geography and number of companies being sued.
The companies could face fines if the lawsuits are successful.
Warehouse owners and outgoing LME CEO Martin Abbott have said the complaints over long lines at warehouses are unjustified, arguing there is no shortage of metal.
Goldman Sachs and JPMorgan dismissed the Florida suit. Goldman tried last week to diffuse the criticism over warehousing by offering immediate access to aluminum for end users holding metal at its Metro warehouses.
"We believe this suit is without merit, and we intend to vigorously contest it. We also note that aluminum prices are down 40 percent from their peak in 2006," a Goldman Sachs spokesman said.
"There are no queues at our warehouses. We believe this suit has no merit," a JPMorgan spokesman said.
Hong Kong Exchanges and Clearing Ltd, owner of the LME, also said both lawsuits were without merit and the LME would contest them vigorously. It added that it had not been served with either of the suits.
A Glencore spokesman declined to comment.
The Florida lawsuit alleges "manipulation of the aluminum market through supply price fixing," among other practices.
The lead plaintiff in the lawsuit, which is seeking class action status and was filed on Aug. 6 in the U.S. District Court for the Northern District of Florida, is Master Screens Inc. and Daniel Price Bart, described in the filing as "a purchaser of beverages sold in aluminum cans."