By Nicole Mordant
VANCOUVER, British Columbia (Reuters) - An antitrust lawsuit
against Barrick Gold Corp.
The world No. 3 gold producer and the U.S. financial giant had asked a Louisiana district court judge to reconsider her previous order that the suit, alleging they colluded for over a decade to suppress the gold price, proceed.
New Orleans-based coin and bullion dealer, Blanchard and Co., brought the case against the two firms last December.
Toronto-based Barrick and New York-headquartered J.P. Morgan Chase tried to get the case thrown out, but were unsuccessful. They then attempted in September to get the court to rethink its earlier ruling, but this too failed, according to a court order dated Nov. 3.
Instead the parties received a reprimand from Judge Helen Berrigan.
"While the defendants are understandably dissatisfied with a ruling not in their favor, this is neither the time nor method to raise these issues again," Berrigan's order said.
Barrick spokesman Vince Borg said the miner would not make a third attempt to get the suit withdrawn but would "vigorously defend" its position. He called the lawsuit "ludicrous".
J.P. Morgan Chase was not immediately available for comment.
Barrick shares were the biggest losers on the Toronto gold board on Tuesday, ending nearly 1 percent weaker at C$25.30. J.P. Morgan Chase's stock dipped 0.3 percent to $36.60 in New York.
Blanchard, which calls itself the largest U.S. retail dealer in rare coins and precious metals, said the ruling meant discovery, a legal term meaning both sides make available to each other documents relevant to the case, could now continue.
"Barrick and Morgan appear to have lost the chance to delay the discovery phase of the case any further," said Blanchard chief executive, Donald Doyle Jr.
Blanchard alleges Barrick and J.P. Morgan Chase made $2 billion in profits from short selling gold. Short selling, or hedging, involves selling something not owned, at current prices, in the belief prices will drop in the future.
Doyle says this practice in the gold market is responsible for depressing the bullion price. Free of short selling, Doyle reckons the gold price would be above $700 an ounce. Bullion was last bid at $379 an ounce.
Barrick has one of the largest hedge books in the gold industry. The book, off its peaks, currently consists of about 16 million ounces of sold-forward gold. Blanchard alleges J.P. Morgan financed Barrick's short selling with "remarkably advantageous terms" that were not available to others.
Barrick is suing Blanchard in a Canadian court for libel.
($1=$1.33 Canadian)
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