by Eric Onstad and Pratima Desai
LONDON (Reuters) – The lawsuit brought by two financial operators against the London Metal Exchange (LME), which will relate to the chaos linked to the March 2022 nickel crisis, will begin on Tuesday.
The LME, the world’s largest metals trading platform, angered investors in March 2022 by canceling around $12 billion (€10.99 billion) in nickel trades after a record price rise.
Hedge fund Elliott Associates and market maker Jane Street Global Trading filed lawsuits totaling $472 million, claiming the LME failed in its responsibilities by calling off the trades.
The LME retorted, in a press release, that “all the measures taken (…) were legal and were taken in the interest of the market”.
The complaint filed by Elliot and Jane Street will be considered until Thursday.
If the LME were found guilty, a second trial would be held to determine the amount of compensation.
Other legal actions have been brought against the LME by other hedge funds, which have agreed to wait for a decision in the Elliott and Jane Street case before proceeding.
The case goes beyond the LME and will determine under what circumstances an operator of an exchange trading platform has the right to reverse legitimate trades, lawyers say.
(Report Eric Onstad, Pratima Desai, Corentin Chapron, edited by Blandine Hénault)
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