Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Hedge fund Elliott sues LME for $456 million over nickel trading halt

Stock Markets Jun 06, 2022 08:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Traders work on the floor of the London Metal Exchange in London, Britain, September 27, 2018. REUTERS/Simon Dawson/File Photo 2/2

By Selena Li and Eric Onstad

HONG KONG/LONDON (Reuters) -U.S. hedge fund Elliott Associates is suing the London Metal Exchange (LME) for $456 million for cancelling nickel trades after chaotic trading in March that forced the exchange to suspend its nickel market, the LME said on Monday.

The legal action piles more pressure on the exchange, which is being probed by regulators and is struggling to restore trust and volumes in its nickel market.

Elliott said the LME should not have halted trading and erased deals after prices more than doubled to over $100,000 a tonne in a matter of hours on March 8.

The LME and LME Clear Limited were named as defendants in the judicial review claim filed in a British court by Elliott Associates and Elliott International last week, the LME's parent company Hong Kong Exchanges and Clearing Ltd said.

An Elliott spokesperson said in an email that the LME had acted "unreasonably and irrationally in particular by taking into account irrelevant factors, including its own financial position".

The LME, the world's largest and oldest market for industrial metals, said it had to take action to protect the market as a whole when trading became disorderly.

In a statement, the exchange said it had "an important role to play in ensuring the market is fair and orderly for all those who wish to participate".

It added that the nickel market had become disorderly, and that it had cancelled deals from midnight to 0815 GMT on March 8 in an attempt to return the market to the time when it had last been orderly.

"The LME therefore considers that Elliott’s grounds for complaint are without merit, and the LME will defend any judicial review proceedings vigorously.”

LME SUED NEARLY A DECADE AGO

Elliott Management, founded and co-led by billionaire Paul Singer, is known for activist investing. The Elliott spokesperson did not say in the email what LME nickel positions it had when deals were cancelled.

The last time the LME was sued was nearly a decade ago when Russian aluminium giant Rusal sought to derail proposed LME reforms aimed at easing huge backlogs to withdraw metal from its global warehousing network.

The LME initially lost the case, but won an appeal https://reut.rs/38VK3bK allowing it to go forward and implement the reforms.

Last month, the LME proposed measures that it said would improve transparency and stability in the over-the-counter (OTC) metals market, including more frequent disclosures of all positions.

HKEX shares closed up 1.6%, underperforming the broader market index, which gained 2.7%.

Hedge fund Elliott sues LME for $456 million over nickel trading halt
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Robert Gida
Robert Gida Jun 06, 2022 9:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"Free market"
Eric Malm
Eric Malm Jun 05, 2022 11:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If there is any kind of law still working in the financial world LME has to pay back the money they stole by cancelling the trades, it's absurd.
Mark Swiatek
Mark Swiatek Jun 05, 2022 11:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email