LONDON, March 5 (Reuters) - Barclays, Deutsche Bank and three other banks have been accused in a lawsuitof manipulating the London gold fix, a benchmark used throughoutthe $20 trillion market for the metal, Bloomberg reported.
Kevin Maher, a New York resident who says he bought and soldgold and gold futures and options, sued in Manhattan federalcourt on Tuesday, the report said, alleging the five banksoverseeing the century-old benchmark colluded to manipulate it.
According to the report, Maher is seeking to represent aclass of all investors who, from 2004 to now, held or tradedgold and gold derivatives that were priced based on the gold fixor who held or traded COMEX gold futures or options.
In a statement, Deutsche said it believed the suit waswithout merit and that the bank "will vigorously defend againstit". Barclays declined to comment. The other banks involved inthe fix - ScotiaMocatta, Societe Generale and HSBC - could not immediately be reached for comment.
Gold fixing happens twice a day in a teleconference betweenbanks. At the start of each fixing, the chairman announces anopening price to the other members, who relay that to theircustomers and, based on orders received from them, instructtheir representatives to declare themselves buyers or sellers atthat price.
The price is adjusted up and down until demand and supplyare matched, at which point the price is declared "fixed". Thefixings are used to help determine prices globally.
Regulators including Germany's Bafin are looking moreclosely at how banks set benchmarks such as the gold fix afterthe Libor rigging scandal exposed widespread interest ratemanipulation.
Maher is seeking unspecified damages on behalf of the class,Bloomberg said.
In January, Deutsche Bank said it was quitting the processafter withdrawing from the bulk of its commodities business.
South Africa's Standard Bank, now selling acontrolling stake in its markets unit to China's ICBC, is emerging as a frontrunner to buy Deutsche'splace in the global gold price-setting process, sources familiarwith the matter told Reuters last month.