[A-List] Banksters' Follies
Annewilliamson at msn.com
Thu Dec 19 05:47:22 MST 2002
Barrick dismisses anti-trust allegations
TORONTO, Dec 18 (Reuters) -- Blanchard and
Co., a U.S. gold and coin dealer, said on
Wednesday it had filed an anti-trust lawsuit
against Canadian miner Barrick Gold Corp.
and J.P. Morgan Chase & Co. for manipulating
the gold price, but Barrick dismissed the
claims as "ludicrous."
New Orleans-based Blanchard said in a
statement distributed by Business Wire that
its anti-trust suit accused Barrick, the
world's second-largest gold producer, and
U.S. financial services firm J.P Morgan Chase
of making $2 billion in short-selling profits
by suppressing the price at the expense of
Privately held Blanchard said in the
statement that it was seeking in legal papers
filed to the U.S District Court for the
Eastern District of Louisiana to end the
trading agreements between Barrick and J.P.
Morgan Chase, and other bullion banks.
It is also seeking payment to Blanchard's
clients for losses caused by the alleged
Toronto-based Barrick said the allegations
were "totally without merit" and said it
would vigorously defend itself and pursue all
of its legal rights.
"Although Barrick has not had an opportunity
to review the complaint in detail, the press
release contains numerous factual
inaccuracies and defamatory statements," a
Barrick spokesman said, reading from a
Shares in Barrick, which is expected to
produce 5.7 million ounces of gold in 2002,
were down as much as 89 Canadian cents after
Blanchard's statement, but rebounded to close
down 20 Canadian cents at C$24.45 in Toronto.
Blanchard's statement said the lawsuit
alleges that in the past five years Barrick
and J.P. Morgan Chase injected millions of
additional ounces of gold into the market, or
several times more than the annual production
of every gold mine in South Africa, the
world's biggest gold producer.
"Since the end of 1987, when the
collaboration between Barrick and J.P Morgan
Chase began, the growth of global income and
wealth would have lifted the gold price to
approximately $740 (an ounce) if the price
had been able to respond to the normal laws
of supply and demand," Blanchard's chief
executive, Donald Doyle, said in the
"If gold had kept pace with inflation, the
price today would be approximately $760."
Blanchard said its suit claimed that by using
privately negotiated derivative contracts and
concealing additional billions of dollars
worth of physical gold with off balance sheet
accounting, Barrick made it virtually
impossible for gold analysts and investors to
determine the size and the market impact of
its trading position.
The lawsuit further alleges that J.P Morgan
Chase financed Barrick's repeated short
selling with advantageous terms not available
to others, including deferred repayments and
no margin calls, Blanchard said.
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