British court set to hear demand for evidence over LME nickel crisis

Flow Traders

16/12/2022 07:00

LONDON, Dec 16 (Reuters) - Hedge fund AQR Capital
Management and four other parties are due to ask a British judge
on Friday to force the London Metal Exchange (LME) to release
documents about decision-making that led the LME to suspend
nickel trading in March.
    AQR and others filed legal action in September after a wild
price spike in nickel spurred the LME to cancel deals worth
billions of dollars, which they said led to "significant losses"
for market participants.
    The other claimants in the filing at the London Commercial
Court were Winton Capital Management, Capstone Investment
Advisors, Flow Traders  FLOW.AS  and DRW Commodities.
    The LME was forced to halt nickel trading and cancel trades
in early March after prices doubled to more than $100,000 per 
tonne in a surge sources blamed on short covering by one of the
world's top producers. 
    AQR and the others said the LME had made only "piecemeal
disclosures" and demanded more documents, which will be the
subject of the hearing at 1400 GMT.
    The exchange, the world's oldest and largest market for
industrial metals, has rejected the legal action as without
merit.
    The LME is also facing lawsuits from U.S. hedge fund Elliott
Associates and Jane Street Global Trading, which are suing the
LME for $456 million and $15.3 million, respectively, for the
cancelled nickel trades.
    British financial regulators launched a sweeping
investigation in April of the suspension of nickel trading while
the LME also commissioned its own independent review of the
matter.
    The LME is owned by Hong Kong Exchanges and Clearing Ltd 
 0388.HK .
 (Reporting by Eric Onstad and Nell Mackenzie in London
Editing by Matthew Lewis)
 ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO;
 Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))