Home Hedge Funds US Hedge Funds Sue LME for USD456 Million Over Nickel Trading Halt

US Hedge Funds Sue LME for USD456 Million Over Nickel Trading Halt


(Yicai Global) June 6 — US hedge funds Elliott Associates and Elliott International have sued the London Metal Exchange for USD456 million because of the suspension of nickel trading on the platform owned by the Hong Kong Stock Exchange in March.

The claimants sued LME and LME Clear as the trading suspension was allegedly unlawful on public law grounds and constituted a violation of the claimants’ human rights, the HKEX said in a filing today.

Trading of all nickel contracts was halted in London on March 8 after prices surged almost three and a half times from the day before to USD101,365 a ton. The trading resumed on March 16 on all LME execution venues. This was the first time that the London exchange had suspended a metal market since 1985.

“Cancellations were made retrospectively to take the market back to the last point in time at which the LME could be confident that the market was operating in an orderly manner,” The HKEX added. “It should be stressed that the LME always acted in the interests of the market as a whole.”

“The LME management is of the view that the claim is without merit and the LME will contest it vigorously,” the Hong Kong bourse noted.

The UK Financial Conduct Authority and Bank of England announced in April that they will conduct a review on the LME’s governance, market regulation, and risk management. The LME also appointed an independent body to evaluate the incident.

Editor: Futura Costaglione

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