S&C Obtains Dismissal of U.S. Silver Price-Fixing Litigation for The Bank of Nova Scotia

The Bank of Nova Scotia (BNS) prevailed in its motion for judgment on the pleadings seeking to dismiss a proposed class action brought by investors who accused BNS and other banks of conspiring to fix silver prices. On May 22, U.S. District Judge Valerie E. Caproni of the Southern District of New York dismissed the action in its entirety with prejudice after more than eight years of litigation, including full fact discovery.

BNS and other banks had participated in a process called the "Silver Fix" to set a price to settle their silver trades with customers and each other. Established in 1897, the Silver Fix was a "Walrasian" auction that was held at noon each business day in London in which the banks used their order books to determine the price at which their buying and selling interests balanced.

In 2014, a putative class of silver traders alleged that these banks violated the Sherman Act and the Commodity Exchange Act by manipulating the Silver Fix and trading on their purported foreknowledge of the Silver Fix price. In 2016, the court sustained the plaintiffs' claims, but noted that they had "barely" stated their claims.

In 2022, BNS moved for judgment on the pleadings on the grounds that the plaintiffs lack antitrust standing, failed to plausibly allege that their injury is directly connected to the challenged conduct, and their claims are impermissibly extraterritorial. Earlier this year, the U.S. Court of Appeals for the Second Circuit held that plaintiffs alleging similar claims as to a similar fixing process for platinum had standing and their claims were not impermissibly extraterritorial.

In her ruling dismissing the Silver Fix litigation, Judge Caproni agreed with BNS that there were important distinctions between the silver and platinum cases in the allegations of manipulation, including the market in which it allegedly occurred and the location of those purportedly involved.

The S&C team representing BNS included Stephen Ehrenberg, Bill Wagener, Jordan Gary, Zoeth Flegenheimer and Stella Meyer.