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For many years De Beers had a stock response when it came to the question of it doing business in the United States. Simply stated, it claimed that it did not do any, and thus would not answer any case brought against it. But, in a recent turnabout, the South African-headquartered company agreed to be subject to the laws of the United States, specifically agreeing to the jurisdiction of the Federal Court in New Jersey, which was to settle lawsuits by U.S. plaintiffs who alleged that the company fixed the price of gems from 1994 to 2005. The settlement of the group suit, or class action, affected anyone who bought diamonds over the past 11 years.
On March 31, 2006, the Court granted preliminary approval for the settlement which has two major components: it provides for cash payments totaling $295 million and "broad injunctive relief prohibiting certain future conduct by De Beers." Of the $295 million, $22.5 million will be paid in settlement to be shared by all entities other than sightholders who purchased diamonds directly from De Beers and from other diamond mining companies such as Rio Tinto. This is a very limited number of people.
Meanwhile, $272.5 million is for the claims of a class of diamond purchasers who are indirect …