Swiss competition body probes banks in precious metals trade

[ZURICH] Competition authorities in Switzerland announced an investigation into some of the world's biggest banks, including HSBC Holdings Plc, on suspicion that they colluded to manipulate the prices of gold, silver and other precious metals.

UBS Group AG, Deutsche Bank AG, HSBC Holdings Plc, Barclays Plc, Morgan Stanley, Julius Baer Group Ltd and a unit of Tokyo- based trading company Mitsui & Co Ltd are also part of the probe, the Competition Commission, known as Weko, said in a statement on Monday.

The regulator said in February said it had opened a preliminary probe into the possibility of price fixing in the precious metals market.

In August, European Union antitrust regulators disclosed that they are investigating precious-metals trading following a US probe that embroiled some of the same banks. The EU watchdog said it is examining possible anti-competitive behavior in spot trading.

The Swiss regulator said it has "indications" the banks may have colluded on pricing between the banks to coordinate prices, namely the bid ask-spread in the precious metals including gold, silver, platinum and palladium.

US prosecutors have been examining whether at least 10 banks, including HSBC, Barclays, JPMorgan Chase and Deutsche Bank manipulated prices of precious metals. The scrutiny follows international probes into the rigging of financial benchmarks for rates and currencies, which have yielded billions of dollars in fines.

The Swiss investigation could last until 2017, with a maximum penalty being a fine, Weko spokesman Olivier Schaller said by phone. He didn't specify a maximum fine, but added that more banks could be investigated.

Spokespeople for Barclays, HSBC and UBS declined to comment. Jan Vonder Muehll, a sokesman at Julius Baer, said the bank is cooperating with the investigation. Morgan Stanley didn't immediately respond to requests seeking comment.

In the US, UBS said in May that it won immunity from criminal fraud charges in a Justice Department investigation into misconduct in the trading of precious metals. The Swiss bank has successfully dodged antitrust penalties after blowing the whistle.

UBS's second-quarter report noted investigations by a number of authorities into precious-metals prices.

In December 2013, eight financial companies agreed in an EU settlement to pay a total of 1.7 billion euros(US$1.9 billion) for colluding over derivatives linked to the London and euro interbank offered rates. HSBC remains under investigation in the Euribor case after refusing to join the accord.

BLOOMBERG