Sachs Group Inc. has been hit with yet another antitrust
lawsuit alleging that the bank and its subsidiaries as well as
the London Metal Exchange conspired to inflate aluminum prices,
including Midwest premiums.
Mich.-based International Extrusions Inc. alleges in the
complaint filed in U.S. District Court in
Michigan that the defendants hoarded metal in
Detroit-area warehouses, restraining aluminum supplies
available to physical metal users.
The Aug. 16 complaint
names New York-based Goldman Sachs Group, GS Power Holdings
LLC, Metro International Trade Services LLC, London Metal
Exchange Ltd. and 10 other defendants named as John Doe.
"We believe this suit
is without merit and we intend to vigorously contest it. We
also note that aluminum prices are down 40 percent from their
peak in 2006," a Goldman spokesman said in an Aug. 19 e-mail to
AMM, noting that the statement pertained to Goldman
Sachs, GS Power Holdings and Metro International.
The LME and
International Extrusions declined to comment.
Extrusions alleged that Goldman, working with the LME, abused
"monopoly" power over Detroit-area warehouses by amassing
stockpiles of nearly 1.5 million tons of aluminum through "get
paid more to do less" agreements and incentives of up to $250
per ton to put metal in sheds. That 1.5 million figure
represents 27 percent of the 5.5 million tons of aluminum
produced annually in the United States and triple U.S. imports
of 500,000 tons per year, the company said.
Goldman and the LME
also netted "hundreds of millions" of dollars in storage fees
as "overbidding and diversion agreements" resulted in
"substantially less aluminum available for sale in the United
States" and wait times of up to 16 months for metal,
International Extrusions alleged.
naming Goldman, other banks and trading companies, the LME or
unnamed "John Does" have been filed by Gwinn, Mich.-based
Superior Extrusion Inc. (
amm.com, Aug. 2); Jacksonville, Fla.-based Master
Screens Inc. and individual plaintiff Daniel Price Bart (
amm.com, Aug. 7); South Elgin, Ill.-based Custom
Aluminum Products Inc.; Reserve, La.-based River Parish
Contractors Inc. (
amm.com, Aug. 9); Lewisville, Texas-based Viva
Railings LLCs and Howell, Mich.-based Regal Recycling Inc.; and
Monticello, Ark.-based boat builder Team Ward Inc., which does
business as War Eagle Boats (
amm.com, Aug. 13).