Hedge funds sue London Metal Exchange for £80m after it cancelled billions of dollars of nickel trades
The London Metal Exchange (LME) is being sued by a group of hedge funds for £80million after cancelling billions of dollars worth of nickel trades.
LME, the world’s biggest metal exchange, suspended nickel trading after a dramatic price spike last March, outraging investors.
AQR Capital Management, DRW Commodities, Flow Traders, Capstone Investment Advisors and Winton Capital Management are seeking damages for their alleged losses.
Legal fight: LME, the world’s biggest metal exchange, suspended nickel trading after a dramatic price spike last March, outraging investors
Hong Kong Exchanges and Clearing, which owns the LME, insisted the claim ‘is without merit’.
The LME is also facing a lawsuit from New York hedge fund Elliott Associates, which is seeking damages worth £379million, while Jane Street Global Trading is pressing for £12.7million.
Nickel trading was suspended after prices doubled to more than $100,000 a tonne in just a few hours – a surge that industry insiders have blamed on short-covering by a producer.
The UK’s financial watchdog, the Financial Conduct Authority, has launched a probe into the LME for possible misconduct.