Dow Jones reports on hearing in Howe case

Section:

Gold case faces tough questions

By Ted Griffith
www.CBS.MarketWatch.com
Nov. 5, 2001

BOSTON (CBS.MW) -- A lawyer alleging a conspiracy by
the federal government and investment banks to artificially
depress the price of gold faced skeptical questioning
Monday from a federal court judge in Boston.

Judge Reginald Lindsay repeatedly asked what
evidence there was to support the allegations of price
fixing in the gold market. Lindsay also questioned
whether high-ranking government officials named in
the suit, including Federal Reserve Chairman Alan
Greenspan, could even be sued, given that federal
officials have certain immunities from litigation.

During the hearing, Lindsay dismissed two of the
counts that accused J.P. Morgan of fraud. The judge
said he would take the other numerous allegations
"under advisement" and make a ruling at some later
point.

Monday's hearing was on a motion filed by the
investment banks and the federal government to
dismiss the suit, which was brought late last year by
Reginald Howe, a consultant to a group called the
Gold Anti-Trust Action Committee. Howe, a
Massachusetts attorney who represented himself,
claims that the U.S. Federal Reserve, the
Swiss-based Bank for International Settlements
and investment firms conspired to drive down the
price of gold. He claims the conspirators want to
depress the price of gold because, among other
things, higher gold prices would signal a warning
of future inflation and call attention to U.S. trade deficits.

In addition to Greenspan and Morgan, the defendants
include U.S. Treasury Secretary Paul O'Neill as well
as the Bank for International Settlements, Goldman
Sachs and Deutsche Bank.

Judge Lindsay questioned Howe on what specific
evidence he had to back up his claims.

"You're supposed to have a basis for your complaint
that it is more than 'it appears,'" Lindsay told Howe.
"A complaint can't go forward on the basis of 'must
have been.'"

Howe alleges that "waves" of unusual selling in the
gold market in recent years support his contention
that a far-reaching price-fixing scheme exists.

After the hearing, Howe declined to predict whether
the judge would allow the case to proceed.

"There's no way to know, we'll get the judge's ruling
n due course," Howe said.

Lindsay set no date for when he will make his ruling
on the motion to dismiss.