Lawsuit alleges conspiracy in aluminum warehousing and commodities trading industry to inflate prices
Agfa Corporation, a multinational company that develops, produces and distributes equipment and supplies for the newspaper, commercial printing and graphics communications industries, filed a class action lawsuit earlier this month alleging the artificial inflation of aluminum prices against the London Metal Exchange (“LME”), Goldman Sachs, JP Morgan Chase and other owners and operators of LME-authorized aluminum warehouses.
The suit, originally filed in the U. S. District Court for the Eastern District of Michigan, alleges the defendants conspired to restrict the supply of aluminum, despite an abundant supply in LME warehouses, to artificially inflate its base price and certain delivery premiums. The artificially inflated prices have allegedly cost purchasers and consumers upward of several billion dollars, according to the complaint.
“This is money that could have gone into creating or preserving jobs, rather than padding the balance sheet of Wall Street traders,” said Shareholder Derek Brandt of the Firm, one of the law firms representing Agfa.
In early December, the Judicial Panel on Multidistrict Litigation considered transfer of a number of pending aluminum market manipulation lawsuits, including the Agfa action. Last week, the JPML transferred these cases to the U.S. District Court for the Southern District of New York, where the Hon. Katherine S. Forrest, United States District Judge, will preside over the MDL.
Agfa’s complaint alleges the defendants artificially inflated prices through various means, including but not limited to, hoarding the metal at LME warehouses, shuffling aluminum from warehouse to warehouse rather than delivering to customers, and paying incentives to aluminum owners to keep their metal stashed in warehouses.
Agfa’s suit is one of the most recent in a series of lawsuits filed against the defendants for manipulating the price of aluminum. Agfa has purchased more than $100 million in aluminum since 2011.
In addition to Simmons, Agfa is represented by Christopher M. Santomassimo of Nicoll Davis & Spinella LLP in Paramus, N.J.; Garrett Wotkyns of Schneider Wallace Cottrell Konecky LLP in Scottsdale, Az.; David R. Scott, Christopher Burke, and Max Schwartz of Scott+Scott LLP in New York City and San Diego, Calif.; Daniel Mogin of the Mogin Law Firm from San Diego, California; Joseph Peiffer of Peiffer Rosca Abdullah & Carr, LLP, of New Orleans; and Joseph Viviano of Viviano, Pagano & Howlett from Mt. Clemens, Mich.
Agfa Corporation v. The Goldman Sachs Group, Inc., et al., U.S. District Court for the Eastern District of Michigan, No. 2:13-cv-14617-PDB; In re: Aluminum Warehouse Antitrust Litigation, MDL No. 2481 (S.D.N.Y.).