Goldman Sachs subpoenaed by US amid aluminium warehouses inquiry

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Goldman Sachs has been subpoenaed by federal regulators investigating complaints that the financial giant’s metals warehouses have intentionally created delays and inflated the price of aluminum.

The New York Times reports that the Commodity Futures Trading Commission has issued subpoenas to Goldman and owners of other major warehouses as part of its inquiry into irregularities in the aluminium market that are believed to have cost consumers billions of dollars since 2010.

The subpoenas seek all internal documents, e-mails, correspondence, voice recordings and other records concerning the warehouse operations dating back to January 2010, according to two people familiar with the documents. The subpoenas also demand documents and correspondence regarding the London Metals Exchange, a private trade association that regulates warehousing. The subpoenas indicate that the federal inquiry has 30 'areas of interest.'

Michael DuVally, a Goldman spokesman, declined to comment on the subpoenas. But during the last month, Gary D. Cohn, Goldman’s president, has said that the company’s warehouse subsidiary never violated any laws or regulations, moved metal only when its customers requested it and never sought to inflate aluminium prices.

Some aluminium owners have filed class-action suits against Goldman. The Federal Reserve is also reviewing whether Goldman and Morgan Stanley have complied with an exemption to the merchant banking law that allows them to own warehouses, refineries, pipelines and other facilities used to store and transport commodities.

Hit the link below to access the complete NY Times article:

U.S. Subpoenas Goldman in Inquiry of Aluminum Warehouses

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