Goldman, JPMorgan in Senates crosshairs for commodities holdings

Updated: Aug 9 2014, 08:22am hrs
US Senator Carl Levin is preparing a last push to bring Wall Street's big commodity traders to heel during his final months in office, wrapping up a nearly two year-long probe that could potentially reveal abuses in energy and metals markets.

Levin's investigators have met with representatives from Goldman Sachs and JPMorgan Chase in recent weeks, according to sources familiar with the matter. Executives from those companies may appear at a hearing as early as September, during which Levin's Permanent Subcommittee on Investigations would present the findings of the probe, the sources said. Spokesmen for Goldman and JPMorgan declined to comment. Specifically, Senate investigators have explored whether Wall Street has abused its commodities holdings at the expense of clients, consumers, the environment or the health of the market, according to the people familiar with the probe.

The probes findings and the possible hearing will add to the firms have already faced from the Federal Reserve and other lawmakers over whether it is appropriate for banks to maintain vast holdings in metals warehouses and other physical commodities businesses.

Companies including MillerCoors and Coca-Cola, for example, have accused warehouses and their owners of distorting supplies, inflating the prices of aluminum, and costing consumers billions of extra dollars annually.