Nickel mayhem, London Metal wins case against hedge funds


The London Metal Exchange (LME) scores in a legal dispute over its management of the nickel market crisis in March 2022. The English High Court has effectively rejected claims for tens of millions of dollars in damages brought by hedge fund Elliot Management and market maker Jane Street Capital, who accused the exchange, that it improperly canceled $12 billion worth of business operations.

The judges concluded that the rules governing the LME allowed it to “cancel, modify or correct” orders if the exchange “deems it appropriate” and that the “urgency” of the situation justified it acting without consulting anyone.

The market spiraled out of control and the price of nickel tripled to over $100,000 per tonne in a matter of hours as the strong bearish position of China’s Tsingshan Company collided with bullish “bets” linked to the Russian invasion. from Ukraine.

Elliott, which sought damages for $456 million in lost profits, has already announced it will appeal, saying it is “concerned about the precedent” set by the ruling. Famed financier Paul Singer’s fund, which manages $59 billion, says “fundamental questions” are being raised about the “absence of certainty in trading” and the “lack of effective checks and balances in UK equity markets”.

Jane Street, which sought $15 million in damages, reserves the right to more thoroughly evaluate its next steps. “We have initiated this case because we believe that market participants should be confident that trades made in good faith are respected,” the company’s statement reads. with careful analysis and utmost attention.”


Source link

Leave a Comment