Three jewelry companies and two dental laboratories have filed a multi-million-dollar antitrust lawsuit charging that the Hunt brothers of Texas "conspired to create a monopoly" in silver to drive up the price.
Accused of conspiring with Nelson Bunker Hunt and his brothers W. Herbert and Lamar to inflate silver prices are the three largest commodity brokers in the nation -- Merrill Lynch, Pierce, Fenner and Smith, the Bache Group Inc. and ContiCommodity Services -- and five Middle Eastern silver investors.
The Hunts, the brokers and the other big buyers of silver should be forced to pay triple damages to anyone who bought silver last winter when the price of the metal temporarily soared from $10 to $50 an ounce, the lawsuit contends.
The three New York jewelry makers who filed the complaint say they bought more than $500,000 worth of silver during January, February and March when prices were at record levels.
The jewelers' lawsuit was filed Monday in U.S. District Court in Manhattan and made public yesterday. Attorneys for some of the defendents said they had not been notified of the lawsuit and could not respond to the charges at this time.
The antitrust complaint is the latest in a series of legal actions started since silver prices collapsed in late March. Lawyers in Chicago, Los Angeles and Boston said yesterday they expect several more lawsuits to be filed in the next few weeks.
Some of the lawsuits are aimed against the Hunts and others who were buying silver when the price was going up, expecting to profit from the increase.
Other cases have been or are expected to be filed against other groups of speculators, accusing them of conspiring to force prices down.
In Boston a group called the "Free Market Compensation Committee" has raised $500,000 to bring legal action against the commodity Exchange Inc. and several of its board members who had large holdings in silver.
Spokesman Brian Walsh said the Comex board members influenced the exchange to modify its rules and freeze new investors out of the silver market, causing prices to collapse. The board members made hundreds of millions of dollars when silver prices plummeted from $50 an ounce to $10, Walsh contends. d
Similar charges were made in congressional hearings by Philip Bloom, a Chicago lawyer, who said yesterday he also is preparing a lawsuit against the exchanges for several clients. Blooms clients include Naji Nahas, a Saudiborn Brazilian silver investor, who was named a co-conspirator with the Hunts in the lawsuit filed Monday in New York.
Nahas and the Hunts were partners in International Metals Investment Corp., a company based in the Bahamas that invested heavily in silver. IMIC also was named a defendent in the lawsuit, filed by Jacmel Jewelry Inc., Berwin Jewelry Co., Diadem Jewelry Creatings Inc., So-Mar Dental Studios Inc., Labco Products Inc. and Benjamin Zeltzer, all of New York.
The complaint claims the Hunts and the other big silver buyers used "an unlawful scheme" to "manipulate and artificially inflate" silver prices. The Hunts' silver-buying techniques, the lawsuit contends, violated the federal Sherman Antitrust Act, which provides treble damages for victims of illegal price-fixing.
The silver users asked the federal courts to designate their case as a class action on behalf of all silver buyers.