Wall Street hedge fund Elliott Management sued the owner of the London Metal Exchange for $456 million over trade cancellations during the nickel crisis in early March.
LME owner Hong Kong Exchanges and Clearing (HKEX) said Elliott filed a complaint with the High Court on June 1.
The lawsuit alleges that the decision to cancel a large number of transactions following a short squeeze “was unlawful on public law grounds and/or constituted a violation of the plaintiffs’ human rights.”
LME management “believes the claim is without merit” and “will vigorously contest it,” HKEX said.
He added: “The cancellations were done retrospectively to bring the market back to the last moment the LME could be sure the market was operating in an orderly fashion. It should be emphasized that the LME has always acted in the interest of the market as a whole.
Elliott has been contacted for comment.
The 145-year-old city’s stock exchange was forced to freeze the nickel market and cancel a day of trading in early March after a short squeeze targeting a Chinese metals tycoon sent nickel prices soaring in above $100,000 a ton and brought several traders to the brink of financial crisis. ruin.
He was accused of bias for undoing the deals, drawing fire from multiple funds. Full nickel trading remained suspended for eight days following the incident.
Prices had initially risen over fears the conflict in Ukraine would affect global supply, but began to rise after traders realized people were betting against the price of nickel – including the Chinese businessman Xiang Guangda – were forced to buy the metal to liquidate their positions.
Regulators from the Financial Conduct Authority and the Bank of England are investigating the episode.
A spokesperson for Elliott confirmed that it had initiated judicial review proceedings against the LME.
He said: “Elliott considers that when the LME canceled the nickel transactions on March 8, 2022, it acted unlawfully in that it exceeded its authority when it canceled those transactions, or exercised the powers he had in an unreasonable and irrational manner, including taking into account irrelevant factors (including his own financial situation) and failing to take into account relevant factors”.
Elliott, led by billionaire Paul Singer, has a reputation for taking legal action, once persuading Ghanaian authorities to seize an Argentine vessel in a 15-year battle over unpaid debts in which he eventually defeated the South American country.
In late April, the LME announced that chief executive Matthew Chamberlain would remain in his role, abandoning earlier plans that he would step down that month.
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Source: www.telegraph.co.uk
This notice was published: 2022-06-06 08:15:11