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Elliott Associates Sues LME For $456 Million Over A Suspension In Nickel Trading: HKEX

Elliott Associates Sues LME For $456 Million Over A Suspension In Nickel Trading: HKEX
Elliott Associates has filed a $456 million lawsuit against the London Metal Exchange (LME) following the suspension and cancellation of nickel trading on the platform controlled by Hong Kong Exchanges and Clearing Ltd, the Hong Kong bourse announced on Monday.
LME and LME Clear Limited were identified as defendants in a judicial review lawsuit brought in a British court in early June by Elliott Associates and Elliott International, according to a filing by LME's parent HKEX.
According to the document, the hedge fund intends to appeal LME's decision to cancel its dealings in nickel contracts executed on or after March 8 at 00:00 British time.
The London Metal Exchange (LME) paused activity and voided nickel trades on March 8 due to market volatility that saw prices treble to more than $100,000 per tonne in hours.
After trading reopened on March 16, traders were irritated by a series of technological difficulties.
According to the complaint, Elliot Associates argues the trade cancellation was "unlawful on public law grounds" and "constituted a violation" of its rights.
According to HKEX, the LME denied the assertion in their statement. “The LME management is of the view that the claim is without merit and the LME will contest it vigorously,” HKEX said.
HKEX shares were up 0.6 per cent by 0400 GMT on Monday, trailing the overall market index, which was up more than 1 per cent.
Following the nickel trading catastrophe, European regulators have focused their attention on the LME. It has prompted authorities and industry participants to advocate for tighter examination of the commodities market's murky corners.
The LME suggested last month steps to strengthen transparency and stability in the over-the-counter (OTC) metals market, including more frequent disclosures of all positions.
According to Reuters, its rival CME Group has begun discussions with market players regarding the possibility of a cash-settled nickel contract for firms.

Christopher J. Mitchell

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