ScotiaMocatta

ScotiaMocatta, originally founded as Mocatta Bullion in 1684, was a precious metal and base metal trading company that operated as the metals trading division of the Bank of Nova Scotia (Scotiabank) from 1997 until January 2019.[1]

ScotiaMocatta
Formerly
Mocatta Bullion
Mocatta & Goldsmid
Mocatta Group
Subsidiary
Founded1684
FounderMoses Mocatta
Defunct2019
ParentScotiabank
Websitescotiamocatta.com

Business

ScotiaMocatta was one of the 10 market-making members of the London Bullion Market Association. Additionally it was a direct participant in the London gold fixing. It had a history of 340 years, and was the only original member of the London Gold and Silver fixes to maintain its seats on both respectively. Following the dissolution of ScotiaMocatta, Scotiabank has directly taken over those memberships.

History

ScotiaMocatta was formed by Scotiabank's acquisition of Mocatta Bullion from Standard Chartered Bank in 1997, which had in turn acquired it from Hambros Bank in 1973.

The company dates back to Moses Mocatta, who emigrated from Amsterdam to London. There he established himself as gold, silver and diamond merchant by 1671, when he opened an account with the English goldsmith-banker Edward Backwell (ca. 1618–1683). Moses Mocatta first sent silver to India in 1676, because silver was cheaper in London than in Bombay or Shanghai. In 1684 the bullion dealer and refiner ″Mocatta″ was set up and served as a broker to the Bank of England and the East India Company in the 18th and 19th centuries. It was renamed ″Mocatta & Goldsmid″ in 1799, after Asher Goldsmid was admitted as partner in 1787.[2]

The firm was solely controlled by the Mocatta and Goldsmid families for 286 years before it merged with Hambros Bank in 1957. Subsequent to 1957, the firm was managed by Edward Mocatta, with involvement and shareholdings variously from Hambros Bank, Standard Chartered Bank, Henry Jarecki, Scotiabank, the Mocatta family and others. With Peter Hambro as Deputy Managing Director and Henry Jarecki as Chairman, the firm dealt in options and futures trading in precious metals and pursued bullion deals in Russia, the United States, South America, Switzerland, Mexico, Germany, China, Hungary, Australia, Japan and South Africa, and became the largest gold and silver counter party to the Soviet Union.

The Mocatta firm has historically acted for central banks, notably the Bank of England and the United States Treasury in market stabilisations, notably the 1913 run on the Indian Specie Bank, and the 1980 attempt by the Hunt brothers to corner the silver market.

Since 1986 the Luxemburg Monetary Institute issued gold coins. For that purpose a Luxemburg corporation, The Luxemburg Mint was created. One of its shareholders was the Mocatta group.[3]

As of 2018, ScotiaMocatta maintained offices in Toronto, New York City, London, Mumbai, New Delhi, Bangalore, Shanghai, Hong Kong, and Singapore.[4][1]

Closure

In 2018, the firm controlled the activities of 160 employees in 10 offices.[5]

On 18 October 2017, The Financial Times of London reported that because ScotiaMocatta was an instrumental lender to Elemetal or its subsidiaries, one of whose gold refinery subsidiaries was corrupted by Peruvian narco-traffickers and thus laundered up to $3.6 billion dollars, the parent firm decided to attempt to sell the business through the intermediation of JPMorgan.[6]

The gold price-fixing scandal and lawsuits of 2016 were also deemed responsible for Scotiabank's review of ScotiaMocatta, upon which result it was dissatisfied.[5] Two people who headed ScotiaMocatta parted ways with Scotiabank in May 2018, after Scotiabank, who had hired JPMorgan to facilitate the sale, failed to find a buyer.[5] By June 2018, the parent had throttled back the money available to ScotiaMocatta for external loans, at the time numbered at $8bn. The parent closed down its relationships with standalone clients and another senior staff member left his employment in mid-May, while another six traders were given notice.[7] In September 2018, the Bank of Montreal hired six traders away from the failure.[8]

As a result of the January 2019 reorganisation, Scotiabank stopped supplying gold to the Italian and Indian jewelry industries. Impetus for the change came from the departure of seven New York-based traders to a Canadian rival, Bank of Montreal.[1]

At the End of April 2020 the Financial Post reported, that Scotiabank was planning to withdraw from its remaining metals trade, including the trade with precious metals, and to wind down its existing activities in this field until the beginning of 2021.[9]

See also

References
  1. "Scotiabank Drops 348-Year-Old Mocatta Name in Metals Unit Revamp". BellMedia. Bloomberg. 19 Jan 2019.
  2. Paul H. Emden: „Jews of Britain. A Series of Biographies“, Sampson, Low, Marston & Co., London 1944, DNB 1004941854, p. 88.
  3. M.A.G. van Meerhaeghe, The Belgium-Luxemburg Economic Union, Tilburg, SUERF Series 54 A, 1987, p. 9.
  4. "Contact Us". ScotiaMocatta. Scotiabank. Retrieved 13 June 2016.
  5. "Exclusive: Scotiabank reworks ScotiaMocatta metals after failed sale - sources". Reuters. 2 May 2018.
  6. "Scotiabank looks to sell gold trading unit after money laundering scandal". THE FINANCIAL TIMES LTD. 18 October 2017. workers at NTR Metals allegedly “knowingly conspired to purchase gold with the intent to promote the carrying on of organised criminal activity, including illegal gold mining, gold smuggling and the entry of goods into the US by false means and statements to US Customs, and narcotics trafficking”
  7. "Scotiabank to scrap half its metals business, sources say". Financial Post, a division of Postmedia Network Inc. 6 June 2018.
  8. "BMO hires six gold traders away from Scotiabank in precious metals expansion". The Globe and Mail Inc.
  9. „Scotiabank to close its metals business: sources“ in the Financial Post on 28. April 2020

Sources
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