Banks Win Dismissal Of U.S. Silver Price-Fixing Litigation
06/01/2023On May 22, 2023, Judge Caproni of the United States District Court for the Southern District of New York dismissed with prejudice a long-running litigation brought by plaintiff traders who in 2014 accused certain financial institutions of conspiring to periodically suppress a daily silver benchmark price set in London in violation of Section 1 of the Sherman Act. In re London Silver Fixing, Ltd., Antitrust Litigation, 2023 WL 3582198 (S.D.N.Y. May 22, 2023). Plaintiffs had accused the financial institutions of manipulating silver prices from 2007 to 2013.
Citing “recent developments in Second Circuit caselaw,” Judge Caproni dismissed plaintiffs’ claims for lack of standing, finding that clarified requirements for antitrust standing warranted dismissal. In particular, the decision noted clarifications following the Second Circuit’s rulings in In re American Express Anti-Steering Rules Antitrust Litigation (“Amex”), 19 F.4th 127 (2d Cir. 2021) (holding that plaintiffs were not efficient enforcers of the antitrust laws because any injury incurred did not occur at the “first step” of the alleged anticompetitive conduct) and in Schwab Short-Term Bond Market Fund v. Lloyds Banking Group PLC, 22 F.4th 103 (2d Cir. 2021) (the Second Circuit again “drew a line between Plaintiffs who transacted directly with Defendants and those who did not.”).
Given these decisions, Judge Caproni found that because plaintiffs were unable to trace their losses to the banks’ alleged efforts to depress a daily silver benchmark price, they were not sufficiently close to the harm to allege standing. To have standing, plaintiffs needed to show something more—for example, that the alleged conduct, which would have occurred before markets opened in the U.S., had some plausible connection to their own transactions many hours later.
Plaintiffs failed to show it was “plausible, as opposed to merely possible” that distorted pricing affected their trades. Rather, as Judge Caproni found, “Plaintiffs’ alleged injury occurs too far down the chain of causality, and any damages are too speculative due to the lack of allegations that would allow the court plausibly to infer that plaintiffs traded at a time during which artificial prices persisted.” Accordingly, Judge Caproni dismissed with prejudice the suit against the remaining financial institution defendants.