In the latest development of the nickel fiasco, fund manager Elliot Associates has sued the London Metal Exchange for nearly half a billion dollars following the cancellation of trades earlier this year.
Elliot Associates has sued LME for $456 million following the suspension and cancellation of nickel trades on the bourse in March, according to a statement by parent company Hong Kong Exchange and Clearing (HKEX).
HKEX subsidiaries LME and LME Clear Limited have been named as defendants in a judicial review claim filed in a U.K. court by Elliott Associates and Elliott International on June 1, the exchange said in a filing.
Nickel Fiasco
Earlier this year, LME was under fire after it suspended and canceled nickel trades following a sharp spike in prices which was in part fuelled by a short squeeze from billions of dollars in positions held by Chinese industrial giant Tsingshan, founded by Wenzhou entrepreneur Xiang Guangda.
Although LME maintains that the trade cancellations were justified because the nickel market had become «disorderly», the decision sparked outrage from some who accused the commodities bourse of favoritism, especially after CEO Matt Chamberlain underlined concerns about «significant stress on a number of […] core members».
«The claimants have alleged that this was unlawful on public law grounds and/or constituted a violation of the claimants’ human rights,» HKEX added in the filing. «The LME management is of the view that the claim is without merit and the LME will contest it vigorously.»
