JPMorgan Chase & Co. (JPM), the biggest U.S. bank, was sued with Goldman Sachs Group Inc. (GS) and Glencore Xstrata Plc (GLEN) over claims they restrained aluminum supplies and drove up prices.
The complaint was filed by a Jacksonville, Florida, direct purchaser, Master Screens Inc., and by individual plaintiff Daniel Price Bart of Tallahassee, who is described in the filing as a “purchaser of beverages sold in aluminum cans.”
The banks and Glencore are accused in the complaint filed yesterday in federal court in Tallahassee of racketeering and conspiring with the London Metal Exchange, hoarding aluminum in Detroit-area warehouses and violating federal antitrust laws. Goldman Sachs was sued on Aug. 1 over similar claims by a Michigan company.
“By inserting itself into a healthy industry producing widely needed commodities, severely degrading functionality and widely distributing costs while itself benefiting, Goldman Sachs and JPMorgan couldn’t fit a more archetypal description of a parasite on the markets,” according to the Florida complaint.
“There are no queues at our warehouses and we believe this suit has no merit,” Brian Marchiony, a spokesman for New York-based JPMorgan Chase, said in an e-mail.
“We believe this suit is without merit and we intend to vigorously contest it,” Michael DuVally, a spokesman for New York-based Goldman Sachs, said in an e-mail. “We also note that aluminum prices are down 40 percent from their peak in 2006.”
Warehousing ‘Giant’
More than 1 million tons of aluminum are stored in the Detroit warehouses, many of which are owned by Goldman Sachs, which charges rent for the storage, according to the complaint, while LME load-out rules curtail how much of the metal leaves.
JPMorgan-owned Henry Bath & Son Ltd., acquired in 2010, is described in the complaint as a “metal warehousing giant.”
The Florida plaintiffs are seeking class action, or group, status, to represent other aluminum buyers and consumers, as well as compensatory damages.
Charles Watenphul, a spokesman for Baar, Switzerland-based commodities group Glencore, declined to comment.
DuVally last week said the complaint filed against Goldman Sachs in Detroit was without merit.
The Florida case is Master Screens Inc. v. Goldman Sachs Group Inc., 13-cv-00431, U.S. District Court, Northern District of Florida (Tallahassee). The Michigan case is Superior Extrusion Inc. v. Goldman Sachs Group Inc., 13-cv-13315, U.S. District Court, Eastern District of Michigan (Detroit).
To contact the reporters on this story: Andrew Harris in the Chicago federal courthouse ataharris16@bloomberg.net; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.