On September 2, 2020, Kessler Topaz Meltzer & Check, LLP (“Kessler Topaz”) filed a class action lawsuit against Bank of Nova Scotia on behalf of investors who purchased precious metals futures contracts (and/or options on those contracts) from between at least January 2008 and until at least July 2016 (the “Class Period”). The action is pending in the United States District Court for the District of New Jersey.
The Alleged Wrongful Conduct
As alleged in the complaint, for years, the defendants engaged in fraudulent and manipulative trading practices in connection with the purchase and sale of gold, silver, platinum, and palladium futures contracts (“precious metals futures contracts”) traded on the New York Mercantile Exchange (“NYMEX”) and the Commodity Exchange, Inc. (“COMEX”) in violation of the Commodity Exchange Act, 7 U.S.C. § 1 et seq. (“CEA”) and the common law. Specifically, the defendants engaged in a long running illicit scheme to “spoof” the market for futures contracts—contracts to enter into a future transaction at a predetermined price. The defendants placed legitimate buy and sell orders, and would then place manipulative orders to artificially drive the price in a favorable direction for the defendants. After the legitimate order was executed, the defendants would cancel the manipulative orders before the manipulative orders could be executed. Accordingly, the spoof orders were designed to, and did, artificially move the prices of NYMEX and COMEX precious metals futures and options contracts during the Class Period in a direction that was favorable to the defendants, but unfavorable to the members of the class. The defendants’ actions were intended to, and did, induce other market participants to trade against the defendants’ genuine orders.
On August 13, 2020, Bank of Nova Scotia entered into a Deferred Prosecution Agreement with the United States Department of Justice in connection with the above conduct. There, Bank of Nova Scotia agreed to pay $60,451,102—including $42,000,000 in criminal fines. Bank of Nova Scotia also agreed that the above facts established “beyond a reasonable doubt” that the defendants “knowingly and intentionally attempt[ed] to manipulate the price of certain commodities for future delivery, namely gold, silver, platinum, and palladium futures contracts.”
If you traded precious metals futures contracts and/or options on those contracts from January 1, 2008 through July 31, 2016, and would like to learn more about this action, please fill out our online form or contact us today toll free at 1-844-887-9500 or info@ktmc.com.
CONTACT:
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-844-887-9500 (toll free) or 1-610-667-7706
Or by e-mail at info@ktmc.com