Banks must face U.S. gold rigging lawsuit; UBS is dismissed

* Barclays, ScotiaBank, HSBC, Societe Generale face claims

* Deutsche Bank settlement agreement expected

* Banks accused of suppressing, exploiting gold prices

By Jonathan Stempel

NEW YORK, Oct 5 (Reuters) - A U.S. judge said gold investorsmay pursue much of their lawsuit accusing four major banks ofconspiring for a decade to fix prices and exploit distortions atthe expense of investors in global markets for the preciousmetal.

Antitrust and manipulation claims can move forward againstBarclays Plc, Bank of Nova Scotia ("ScotiaBank"), HSBC Holdings Plc and Societe Generale, U.S. District Judge Valerie Caproni in Manhattan saidin a decision made public on Tuesday.

Investors allege that the banks conspired from 2004 to 2013to fix prices. They did not estimate the size of the banks' goldportfolios, but said the gold derivatives market alone was aslarge as $650 billion during the class period.

"From the gold plaintiffs' standpoint, it's a verysubstantial victory," Dan Brockett, a partner at Quinn EmanuelUrquhart & Sullivan representing the investors, said in a phoneinterview on Wednesday.

Deutsche Bank AG settled related claims in April,and the investors plan to seek preliminary approval of asettlement, Brockett said.

Terms have not been disclosed, but Deutsche Bank has put theexpected payment in escrow, he said.

In a separate case involving the silver market, Caproni saidanother group of investors may pursue market rigging claimsagainst ScotiaBank and HSBC.

Both decisions dismissed UBS Group AG as adefendant, saying there was nothing showing it manipulatedprices, even if it benefited from market distortions.

Barclays spokesman Andrew Smith, ScotiaBank spokesman RickRoth, Societe Generale spokesman Jim Galvin and Deutsche Bankspokeswoman Amanda Williams declined to comment. UBS spokeswomanErica Chase said the bank is pleased with the decisions. HSBChad no immediate comment.

Investors have several lawsuits before the Manhattan courtaccusing banks of conspiring to rig rates and prices infinancial and commodities markets.

In the gold case, investors said Barclays, Deutsche Bank,HSBC, ScotiaBank and Societe Generale conspired to manipulateprices of gold, gold futures and options, and gold derivativesthrough twice-a-day meetings to set the London Gold Fixing.

The investors said this conspiracy let the banks suppressprices and reduce risk at other investors' expense.

In her 73-page decision, Caproni said the investorsplausibly alleged that the five banks recklessly created"artificial price dynamics" for gold, and that their misconductwas the "proximate cause" of the distortions.

She let the investors pursue antitrust claims for allegedunlawful restraint of trade from January 2006 to December 2012.The judge dismissed a claim for unjust enrichment.

Caproni gave the investors 14 days to amend their complaint.

The case is In re: Commodity Exchange Inc Gold Futures andOptions Trading Litigation, U.S. District Court, SouthernDistrict of New York, No. 14-mc-02548. (Reporting by Jonathan Stempel in New York; Editing by DavidGregorio)