Column: LME nickel lawsuits are about principle as much as money – by Andy Home (Reuters – June 9, 2022)

LONDON, June 9 (Reuters) – The London Metal Exchange’s (LME) nickel nightmare continues. U.S. hedge fund Elliott Management and trading house Jane Street are suing the exchange for $456 million and $15.3 million respectively over its handling of the nickel market meltdown in March.

The LME suspended trading in its nickel contract at 0815 UK local time on March 8 after the price exploded to $101,365 per tonne. It also cancelled all trades between midnight and the market halt.

A legal reaction from aggrieved long position holders was only to be expected. The LME and its owner Hong Kong Exchanges and Clearing (HKEx) (0388.HK) have dismissed the claims and “will defend any judicial review proceedings vigorously”.

The legal action will be a lawyerly stress-test of the LME rule-book, particularly the definition of what constitutes an orderly market. But this is about more than just money.

For the rest of this column: