A U.S. investor has accused the Bank of Nova Scotia, Deutsche Bank and HSBC of engaging in an ongoing conspiracy to fix the price of silver.

Investor J. Scott Nicholson alleges that thousands of small investors around the world have been put at a disadvantage by the secretive way in which prices for the physical metal, as well as futures contracts, are set by the financial institutions.

The three firms have knowingly engaged in “an unlawful combination, agreement, and conspiracy” to “intentionally manipulate” the price of physical silver and silver derivatives, including futures contracts, according to the lawsuit.

“We intend to vigorously defend ourselves against this suit,” a spokesperson for Toronto-based Bank of Nova Scotia said in an email.

None of the allegations have been tested in court.

The lawsuit, filed in the Southern District of New York on Friday, seeks to establish a class action that could have thousands of members, the court filing states.

The class would include anyone who has traded futures contracts for silver from Jan. 1, 2007, through to the present.

The plaintiff is a resident of Washington, D.C. who bought and sold silver futures contracts and suffered net losses “due to the presence of artificial prices,” the lawsuit states.

For almost 120 years, the price of silver has been set by a small group of international banks. The group holds a conference call, known as the London Silver Fixing, each business day to set the price for the precious metal, according to the court filing.

The price, then published to the market, is the starting point for physical silver that day, as well as the basis for silver futures contracts.

“Despite the importance of the Silver Fixing and its impact on the silver market as a whole, the entire process takes place in secrecy. The daily conference calls are completely private. There are no records of what is said on these daily conference calls and there is no regulatory oversight of the Silver Fixing,” the court documents say.

“The extreme level of secrecy creates an environment that is ripe for manipulation.”

The defendants that are responsible for fixing the market price are allowed to trade both physical silver and silver derivatives before, during, and after the conference call, the lawsuit states.

The group manipulated prices “to artificial levels,” the court filing alleges, resulting in “hundreds of millions (if not billions) of dollars in illegitimate profits for the defendants.”

Since the Libor interest-rate fixing scandal that shook London financial markets last year, gold and silver price setting processes have drawn more scrutiny from regulators.

The U.S. Commodity Futures Trading Commission, the U.K. Financial Conduct Authority, and the German Federal Financial Supervisory Authority are currently investigating the silver price process.

In January, Deutsche Bank announced plans to leave the leave gold and silver price setting. In May, the group that administers the silver fixing said it will end the practice on Aug. 14.

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