Greenspan, Deutsche Bank u.a. angeklagt!!

verfasst von R.Deutsch, 13.12.2000, 20:53

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Gold Anti-Trust Action Committee - GATA
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The following Complaint was filed on December 7, 2000, in the United
States District Court for the District of Massachusetts, Boston,
Massachusetts. For publication here, the original document has been
converted to HTML format. While every effort has been made to
reproduce it exactly, the official version is the filed document.



UNITED STATES DISTRICT COURT

District of Massachusetts

Civil Action No.

00-CV-12485-RCL

______________________________________

)

Reginald H. Howe, )

Plaintiff, )

)

v. )

)

Bank for International Settlements, )

Alan Greenspan, )

William J. McDonough, )

J.P. Morgan & Co. Inc., )

Chase Manhattan Corp., )

Citigroup, Inc., )

Goldman Sachs Group, Inc., )

Deutsche Bank AG and )

Lawrence H. Summers, )

Secretary of the Treasury, )

Defendants. )

______________________________________)



COMPLAINT



I. Jurisdiction

1. This is a complaint for damages and injunctive relief
arising out of manipulative activities in the gold market
from 1994 to the present time orchestrated by government
officials acting outside the scope of their legal or
constitutional authority and certain large bullion banks
active in the over-the-counter gold derivatives markets and
on the Commodities Exchange ("COMEX") in New York.
The complaint alleges horizontal price fixing in violation of
Section 1 of the Sherman Act, securities fraud in violation of
Section 10(b) and Rule 10b-5 of the Securities Exchange Act
of 1934 ("Exchange Act"), common law fraud and breach of
fiduciary duty by the directors of the Bank for International
Settlements with regard to holders of its American issue, and
violations of the Constitution by federal officials acting
under color of federal law but wholly outside the scope of
their legal or constitutional authority. Subject matter
jurisdiction of the federal claims is based on 15 U.S.C. s.
15(a) (antitrust) and s. 78aa (violations of the Exchange
Act), 28 U.S.C. s. 1331 (federal question), s. 1337 (commerce
and antitrust) and s. 2201 (declaratory relief), and 12 U.S.C.
s. 632 (international banking and financial transactions).
Supplemental jurisdiction of the common law claims is
based on 28 U.S.C. s. 1367.



II. Parties, Venue and Standing

2. The plaintiff, Reginald H. Howe, is an American citizen,
residing currently and at all times material hereto at 49 Tyler
Road, Belmont, Massachusetts 02478. He is suing in his
individual capacity as: (1) the duly registered holder of six
shares of the American issue of the Bank for International
Settlements; and (2) the holder of 1200 depositary shares of
Gold-Denominated Preferred Stock, Series II, of
Freeport-McMoran Copper & Gold, Inc. The plaintiff is the
proprietor of The Golden Sextant (www.goldensextant.com),
an internationally recognized website containing
commentaries, essays and analyses relating to gold, and a
member of Golden Sextant Advisors LLC. The plaintiff has
engaged in research and analysis on gold derivatives, which
are instruments such as forward contracts, futures, options
and swaps whose value is tied to -- or derived from -- the
price of gold, and in this connection has uncovered
considerable evidence of their use to manipulate gold prices.

3. While the plaintiff has not assigned any part of this action
to others and retains full control thereof, he has received
and expects to continue to receive support, both financial
and informational, from the Gold Anti-Trust Action
Committee Inc. ("GATA"), a civil rights and educational
organization formed under Delaware law in January 1999 to
expose manipulation of the gold market by certain bullion
banks. The plaintiff was a contributor to GATA's study on
the gold market, Gold Derivative Banking Crisis, which is
posted at its website (www.gata.org) and has been
downloaded in full PDF format more than 20,000 times. The
plaintiff was also a member of the GATA delegation that
met with the Hon. Dennis L. Hastert, Speaker of the U.S.
House Representatives, in May 2000 to present to him the
conclusions of the GATA study. Much of the evidence cited
in this complaint comes from GATA's many friends and
supporters worldwide.

4. The defendant Bank for International Settlements
("BIS"), frequently described as"the central banks' central
bank," describes itself as an international organization but
has not been so designated under the International
Organizations Immunities Act, 22 U.S.C. s. 288 et seq. The
BIS is headquartered at CH-4002 Basle, Switzerland. Its
principal owners and customers are the central banks of the
major industrial nations. The BIS accepts gold deposits,
makes gold loans, holds approximately 200 metric tonnes of
gold for its own account, and is an active participant in the
gold market. Its manager responsible for foreign exchange
and gold, Giancomo Panizzutti, received the"Man of the
Year Award" from the COMEX at its annual gold dinner in
New York recently. Under the auspices of the BIS, gold
derivatives (along with foreign exchange, interest rate, equity
and other derivatives) are subject to significant regulation
and reporting, including: (1) the Basle Capital Accord, which
sets minimum bank capital adequacy requirements for
off-balance sheet derivatives; and (2) protocols for disclosure
of information regarding derivatives, both in the financial
statements of individual firms and through reports prepared
by national regulatory authorities as well as by the BIS from
country data submitted to it.

5. The defendant Alan Greenspan is Chairman of the Board
of Governors of the U.S. Federal Reserve System ("Fed"),
20th Street and Constitution Avenue, NW, Washington,
D.C. 20551. Mr. Greenspan has served ex officio as a
director of the BIS continuously since September 1994.
When the BIS was formed in 1930, 15% of its original
capital -- the so-called American issue or tranche -- was
subscribed publicly in the United States, thereby giving the
Fed the right to vote these shares when, as and if it assumed
the two seats allocated to the American issue on the BIS's
board. However, by a public pronouncement issued May 15,
1929, Secretary of State Henry L. Stimson forbade"any
officials of the Federal Reserve system either to themselves
serve or to select American representatives as members of
the proposed International Bank." In fact, the two American
seats on the BIS's board remained vacant until July 1994,
when Mr. Greenspan, without any formal authorization by
Congress, the President or the Secretary of State, acted to
assume them for the Fed. Since September 1994, the Fed's
two nominees have participated fully in the affairs of the BIS
and voted the shares of the American issue.

6. The defendant William J. McDonough is President of the
Federal Reserve Bank of New York ("N.Y. Fed"), 33 Liberty
Street, New York, New York 10045. Mr. McDonough has
served as a director of the BIS continuously since September
1994, occupying the second seat allocated to the American
issue under the BIS's original plan of organization. As of
August 2000, approximately 7127 metric tonnes of
"earmarked" gold belonging to foreign official institutions,
mostly central banks, were held in custody accounts at the
N.Y. Fed, down from 8621 tonnes at the end of 1995. At the
end of 1999, the N.Y. Fed held gold certificates covering over
40% of the total U.S. gold stock, far more than any other
Federal Reserve Bank, and up from 30% ten years
previously.

7. The defendant J.P. Morgan & Co. Inc. ("Morgan") is a
global financial services firm with its head office at 60 Wall
Street, New York, New York 10260, and a usual place of
business at 2 International Place, Boston, Massachusetts.
Morgan is a major international bullion bank. Its
wholly-owned commercial bank subsidiary, Morgan
Guaranty Trust, is required to provide regular quarterly
reports on its gold derivatives to the U.S. Controller of the
Currency ("OCC"). As of June 2000, Morgan reported
US$29.7 billion notional amount of gold derivatives, up
from $18.4 billion one year earlier.

8. The defendant Chase Manhattan Corp. ("Chase") is a
bank holding company with its head office at 270 Park
Avenue, New York, New York 10017, and a usual place of
business at 101 Federal Street, Boston, Massachusetts. Chase
is a major international bullion bank and recently often a
heavy seller of gold on the COMEX. Its wholly-owned
commercial bank subsidiary, Chase Manhattan Bank, is
required to provide regular quarterly reports on its gold
derivatives to the OCC. As of June 2000, Chase reported
US$35 billion notional amount of gold derivatives, up from
$20.5 billion one year earlier.

9. The defendant Citigroup, Inc. is a diversified financial
services holding company with its head office at 153 East
53rd Street, New York, New York 10043, and a usual place
of business at 1 International Place, Boston, Massachusetts.
Citibank N.A. ("Citibank"), Citigroup's wholly-owned
commercial bank subsidiary, is a major international bullion
bank, and is required to provide regular quarterly reports on
its gold derivatives to the OCC. As of June 2000, Citibank
reported US$11.4 billion notional amount of gold
derivatives, up from $7.2 billion one year earlier. Together,
Morgan, Chase and Citibank accounted for about 83% of
all gold derivatives reported to the OCC in June 2000, and
75% one year earlier. In combined notional amount, the
gold derivatives of these three banks increased by over $30
billion, or by over 65%, during this one year period while
those of all other reporting U.S. commercial banks remained
virtually flat at slightly over $15 billion.

10. The defendant Goldman Sachs Group, Inc. ("Goldman")
is a global investment banking and securities firm with its
head office at 85 Broad Street, New York, New York 10004,
and a usual place of business at 125 High Street, Boston,
Massachusetts. Goldman is a major international bullion
bank and recently often a heavy seller of gold on the
COMEX. Goldman is generally regarded as a major
purveyor of gold derivatives. However, not being a
commercial bank, Goldman does not report its gold
derivatives to the OCC.

11. The defendant Deutsche Bank AG ("Deutsche Bank") is
an international bank with its head office at Taunusanlage
12, D-60262, Frankfurt am Main, Germany, and a usual
place of business at One Federal Street, Boston,
Massachusetts. Deutsche Bank is a major international
bullion bank and recently often a heavy seller of gold on the
COMEX. In June 1999 Deutsche Bank acquired Bankers
Trust, a U.S. commercial bank which itself had a significant
gold derivatives business. In its 1999 annual report,
Deutsche Bank reported approximately US$51.2 billion
notional amount of gold derivatives at year-end, up from
$16.2 billion one year earlier. Most of this increase came in
the last half of the year.

12. The defendant Lawrence H. Summers is the Secretary of
the Treasury. Pursuant to 31 U.S.C. s. 5302, the Secretary of
Treasury has exclusive control of the Exchange Stabilization
Fund ("ESF") subject only to the approval of the President.
The ESF and the Fed are the only instrumentalities of the
federal government with broad statutory authority to trade
in gold. This authority was conferred at a time when the
dollar was officially defined by Congress as a specified
weight of gold, and when maintenance of the dollar's official
gold value was a matter of substantial legal and practical
concern. Public financial statements of the ESF provide
evidence of its intervention in the gold market, particularly
since 1998.

13. Collectively the defendants represent all the principal
parties required for a just and complete adjudication of the
price fixing claims. The publicly reported gold derivatives of
two other major international banks engaged in this
business, UBS AG and Credit Suisse Group, do not show the
same extraordinary growth patterns over the past two years
as the gold derivatives of the defendant bullion banks, nor
have these two Swiss-based banks recently been reported as
frequent heavy sellers of gold on the COMEX. An
examination of the gold hedging activities of the world's two
largest gold mining companies, AngloGold Ltd. based in
South Africa and Barrick Gold Corp. based in Canada,
suggests that both companies have material non-public
knowledge of the gold price fixing scheme which they have
used to their advantage, but neither company appears to
play a critical role in implementing the scheme.

14. The plaintiff purchased his BIS shares, which then traded
over-the-counter in Basle but now trade on the Swiss
Exchange, in 1989 through an American brokerage firm. The
shares were held in street name until 1997, when the plaintiff
registered them in his name on the books of the BIS and
soon thereafter received share certificate no. 031419
inscribed to him at his U.S. address, where the certificate
remains. The plaintiff purchased his 1200 depositary shares
of Gold-Denominated Preferred Stock, Series II, of
Freeport-McMoran Copper & Gold, Inc., at various times
from 1995 through 1999. By its terms, each depositary share
pays a quarterly cash dividend equal to the value of
0.0008125 ounce of gold and will be redeemed in February
2006 for the cash value of 0.1 ounce of gold. The quarterly
dividends are cumulative, but to date all payments have
been timely made based on the arithmetic average of the
London PM gold price over the relevant preceding five-day
period.

15. By a"Note to Private Shareholders" dated September
15, 2000, mailed to the plaintiff at his U.S. address, the BIS
gave notice that its board planned to vote at a meeting on
January 8, 2001, to compel all private holders of the
American, Belgian and French issues to surrender their
shares against a payment of SwF16,000 (approx. US$9280)
per share notwithstanding an opinion from J.P. Morgan &
Cie SA, a wholly-owned French-based subsidiary of Morgan,
setting the per share net asset value at US$19,099, or more
than twice what the BIS proposes to pay for the shares that
it plans to take.

16. Venue is based on 28 U.S.C. s. 1391(b)(2) as to all
defendants, s. 1391(c) with respect to the corporate
defendants having usual places of business in Boston,
Massachusetts, s. 1391(d) with respect to the BIS and
Deutsche Bank, and s. 1391(e)(2) and (3) with respect to
Messrs. Greenspan, McDonough and Summers, all of whom
are acting"under color of [federal] legal authority" with
respect to the matters alleged notwithstanding that their
conduct falls wholly outside their legal and constitutional
authority. Venue of the claims under the Exchange Act is
also based on s. 27 thereof, 15 U.S.C. s. 78aa. Venue of the
claims under the Sherman Act is also based on s. 12 of the
Clayton Act, 15 U.S.C. s. 22, as to the corporate defendants.



III. Development of Today's Gold Market

17. From 1792 to the closure of the gold window in August
1971, gold functioned in an official monetary role under the
Constitution and laws of the Unites States. Gold's use in
ordinary domestic coinage ended in 1934 with the monetary
measures of the New Deal, including the devaluation of the
dollar from $20.67/ounce to $35/ounce and a general
prohibition on the ownership of gold by United States
citizens. Under the Bretton Woods Agreements (59 Stat. 512
(1945)) adopted after World War II, gold remained at the
center of the international monetary system and the United
States committed itself to redeeming dollars presented by
official foreign monetary institutions at the legal standard of
$35/ounce. When the United States unilaterally ceased
redeeming dollars for gold in August 1971, the Bretton
Woods system collapsed. Since then, the international
payments system has moved to floating exchange rates with
no currency convertible into gold at fixed parities. The
Second Amendment to the Articles of the International
Monetary Fund ("IMF"), adopted under U.S. pressure in
1978, further limits the use of gold for official monetary
purposes.

18. In 1972, Congress authorized and directed the Secretary
of the Treasury to establish a new par value for the dollar of
$38/ounce (Pub. L. 92-268, s. 2, 86 Stat. 116 (1972)), which it
amended in 1973 to $42.22/ounce or 0.828948 IMF Special
Drawing Right. Pub. L. 93-110, s. 1, 87 Stat. 352 (1973).
Effective April 1, 1978, Congress repealed the 1973 par value
act, leaving the dollar for the first time since 1792 statutorily
undefined with reference to gold or silver. Pub. L. 94-564, s.
6, 90 Stat. 2661 (1976), repealing 31 U.S.C. s. 449. See 31
U.S.C. ss. 314, 821, repealed by Pub. L. 97-258, s. 5, 96 Stat.
877 (1982).

19. In 1974, Congress eliminated the restrictions that it had
adopted forty years earlier on private ownership of gold by
American citizens. Shortly thereafter trading of gold
contracts was resumed on the COMEX. In 1977, Congress
repealed the prohibition on gold clauses in private contracts,
enabling the issue of gold-linked securities. Under the Gold
Bullion Coin Act of 1985 (31 U.S.C. s. 5112, as amended by
Pub. L. 99-185, 99 Stat. 1177), Congress authorized the
United States to resume issuing gold coins having a legal
tender face value but to be sold to the public at a price equal
to the market value of the bullion at the time of sale plus
costs of minting and distribution.

20. By its actions described in paragraphs 18-19 above,
Congress effectively relegated gold to the status of an
ordinary commodity for purposes of federal law, leaving its
value against the dollar to be determined by market forces
and without intervention by the Treasury, the ESF or the
Fed, none of whom were given any legislative guidance
whatsoever with respect to any particular price or price level
for gold.

21. Although gold is now an ordinary commodity under
federal law, it retains its intrinsic character as permanent,
international money. Many of the world's nations, and most
of its central banks, continue to hold significant quantities
of gold as a part of their international monetary reserves. Of
the estimated approximately 120,000 metric tonnes of
above-ground world gold stocks, some 32,000 tonnes are
currently claimed as reserves by official monetary
institutions. (One metric tonne equals 32,150.7 troy ounces.)
After the U.S. dollar, gold is the second largest component
of official international monetary reserves. In addition, its
price is widely regarded as an important economic indicator,
particularly as a measure of U.S. inflationary pressures and
the international strength of the dollar.

22. Because of its intrinsic character as money and its
availability in quantity, gold functions in today's
international markets as a stateless currency. Like any major
currency, gold is not only borrowed and loaned at interest,
but also arbitraged in spot and forward markets against
other currencies on the basis of relative interest rates.
Although gold interest rates are generally referred to as
"lease" rates, the term is technically a misnomer. Gold is
borrowed to be spent and repaid like a currency, not rented
to be used and returned like a house or a car.

23. Since they were delinked, the dollar and gold have
developed different interest rate structures. Lease rates on
gold generally run at significantly lower levels than dollar
interest rates, creating a situation of"contango" in gold
futures, meaning that the dollar prices of gold for future
delivery are higher than the spot price for current delivery.
(The opposite of contango is"backwardation," meaning
that spot prices are higher than futures prices.) Against the
dollar, the contango on gold expressed as a percentage is
roughly the U.S. Treasury bill rate less the lease rate. For
gold to go into backwardation, this number would have to
turn negative, i.e., the lease rate would have to exceed the
Treasury bill rate.

24. Unlike other commodities where situations of contango
and backwardation often result from varying expectations
about future versus current supply, contango or
backwardation in gold -- as in currencies -- is governed by
relative interest rates since ordinarily neither gold nor
currencies are subject to significant constraints with regard
to current versus future supply. Currencies can be printed at
virtually no cost by their issuing authorities. Gold, because it
is produced for accumulation rather than consumption, is
unique among commodities in that nearly all the gold ever
produced remains in above-ground stocks, including the
approximately 32,000 metric tonnes in official reserves.

25. Gold is traded internationally on a 24-hour basis in both
physical and paper forms, with major markets in London,
New York, Hong Kong, Tokyo, Zurich and Dubai. However,
from the perspective of price discovery, the most important
markets are the London Bullion Market Association
("LBMA") and the COMEX. Historically, the London

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gesamter Thread:

• Greenspan, Deutsche Bank u.a. angeklagt!! - R.Deutsch, 13.12.2000, 20:53
  • Re: Greenspan, Deutsche Bank u.a. angeklagt!! / Danke, Reinhard... - JüKü, 13.12.2000, 21:14
    • http://www.gata.org/latest.html - Citrus, 13.12.2000, 21:36
      • http://www.goldensextant.com/Complaint.htmlanchor3130 (owT) - Citrus, 13.12.2000, 21:42
        • http://www.gold-eagle.com/editorials_00/howe121000.html (owT) - Citrus, 13.12.2000, 21:53
  • Das wird die Mutter aller Rohrkrepierer - Luschi, 14.12.2000, 08:27
    • Re: Für die einen ist es... - Baldur der Ketzer, 14.12.2000, 10:22
      • Re: Für die einen ist es... - Luschi, 14.12.2000, 19:39
        • Re: Für die einen ist es... - Baldur der Ketzer, 14.12.2000, 20:09