2 Brokerage Firms Settle Silver Case
Two brokerage houses accused of joining in a conspiracy to corner the silver market in 1979 and 1980 have paid Minpeco SA, Peru’s leading minerals company, a total of $34 million in an out-of-court settlement, Minpeco said Wednesday.
The two brokerages--Merrill Lynch & Co. and Prudential-Bache Securities Inc.--were among several defendants in a multimillion-dollar civil lawsuit. Both firms were scheduled to go to trial early next year along with the Hunt brothers of Dallas, ACLI International Commodity Services and a group of private investors.
The settlement follows by a month U.S. District Judge Morris E. Lasker’s refusal to drop the brokerages from the suit.
The case alleges that Nelson Bunker Hunt and his brother William Herbert Hunt conspired with silver futures traders, including their youngest brother Lamar, and the brokerage houses that handled their silver futures accounts to manipulate the price of silver and silver futures.
Minpeco, the main plaintiff, is trying to recoup more than $200 million in losses because of the alleged price manipulation.
$61 Million in Settlements
Previously, Minpeco had settled with E. F. Hutton & Co., Continental Grain Co.’s Conti-Commodity Services unit and Banque Populaire Suisse for a total of about $27 million.
Larry Sennett, a spokesman for Minpeco, said settlements in the case now total $61 million.
Spokesmen for both Merrill Lynch and Prudential-Bache said their firms still denied any wrongdoing in the matter. The firms decided to settle rather than incur the time and expense of a trial and appeals.
“We felt from all points of view, it was best to put the matter behind us,” a Prudential-Bache spokesman said.
The case actually involved Prudential-Bache’s predecessor firm, Bache Halsey Stuart Shields Inc., the spokesman added.
Prudential-Bache and Merrill Lynch had earlier sought a ruling from Lasker that the plaintiff’s evidence was insufficient to prove that they participated in the silver conspiracy. But Lasker denied their request.
