The judicial review was filed by Jane Street Global Trading LLC in the English High Court and served on the LME and its clearing house on Monday, Hong Kong Exchanges & Clearing Ltd., owner of the British exchange, said in a statement. The claim is baseless and will be vigorously challenged, he said.
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The Hong Kong Stock Exchange revealed on Monday that two vehicles under Elliott Investment Management are also seeking damages from the LME. The UK stock exchange has been widely criticized for its handling of the nickel market crisis and is also facing scrutiny from national regulators.
“The LME’s arbitrary decision to call off nickel trading during a time of heightened volatility seriously undermines the integrity of the markets and sets a dangerous precedent that calls future contracts into question,” Jane Street said in comments. by e-mail. The trading company “has taken this action to recover its losses caused by the illegal actions of the LME and to strengthen the stock exchange and restore market confidence in it,” he said.
The LME suspended its nickel market on March 8 and controversially canceled $3.9 billion in trades after prices jumped in a massive squeeze centered on a large short position held by nickel tycoon Xiang Guangda. While Xiang stands out as the big short, no trader or investor on the other side has been credited or blamed for driving prices up.
Hedge funds, drawn to nickel as a bet on the electric vehicle revolution and due to worries about Russian supply disruptions, would be among the bulls. Collectively, the investment funds took bullish bets on nickel to an all-time high on Feb. 18, the week before the invasion of Ukraine.
(By Alfred Cang)