The plaintiffs in a multidistrict silver rigging case pending in New York, In re: London Silver Fixing Ltd. Antitrust Litigation (S.D.N.Y., Case No.: 1:14-md-02573), have sought to amend their complaint based on newly acquired “smoking gun” evidence concerning an alleged conspiracy by certain financial institutions to rig the price of silver and silver related financial instruments. With this new “smoking gun” evidence, plaintiffs contend that they are now able to cure certain pleading deficiencies previously identified against UBS, one of the named bank defendants. Plaintiffs further contend that there is evidence of collusive price manipulation against the proposed new defendants: Barclays Bank PLC; Barclays Capital Inc.; Barclays Capital Services Ltd.; BNP Paribas Fortis S.A./N.V.; Standard Chartered Bank; Bank of America Corporation; Bank of America, N.A.; and Merrill Lynch, Pierce, Fenner & Smith Inc. The new evidence includes electronic chats from various traders, which purportedly demonstrate attempts to manipulate the silver market by coordinating trades in advance and “spoofing,” among other things.

According to public reports, the “smoking gun” evidence came “[e]ight months after Deutsche Bank AG settled a lawsuit claiming it manipulated gold and silver prices.”[1] In plaintiffs’ memorandum in support of their motion to amend, they explain that the materials they received from Deutsche Bank as part of their proposed settlement provided them with evidence that “far surpasses” the conspiracy they previously alleged. Plaintiffs also maintain that the defendants will suffer no prejudice by the amendment because, even though the case is a few years old, the parties have not taken depositions or produced documents, other than the Deutsche Bank materials.

UBS, who was dismissed from the case in October 2016, but may be brought back in if the motion to amend is granted, challenged plaintiffs’ assertions that they have cured their pleading defects. In UBS’s response brief, the bank argues that, even if plaintiffs’ allegations were true, they do not show that UBS had “control” over the silver fixing at noon London time (which is when the price of silver was set), or that they had “advance knowledge” of the fix price. UBS further contends that plaintiffs fail to connect the new evidence to actually executed transactions. In addition, and contrary to the plaintiffs’ position, UBS argues the new allegations would change the plaintiffs’ theory and the scope of the current action, which would unfairly prejudice the bank. UBS further maintains that the proposed complaint would not withstand a motion to dismiss.

Plaintiffs seek until December 22, 2016 to file their reply brief. Thereafter, the Court will determine whether the new evidence truly is the “smoking gun” that plaintiffs contend it to be. In any event, there appears to be a trend developing in these large cases brought against several financial institutions. Specifically, it is now common to see one bank settle with plaintiffs before all others, presumably at a discount, with the promise to aid plaintiffs in prosecuting their claims against the remaining bank defendants. We have seen the same strategy at play in the class action litigation brought against various banks arising out of the LIBOR manipulation. If the strategy is successful, we can expect to see it implemented in future actions, as well.