HEDGE FUNDS SUE LME FOR £80M OVER NICKEL DEBACLE

THE London Metal Exchange (LME) is being sued by a group of hedge funds for £80m after cancelling billions of dollars worth of nickel trades.

LME, the world’s biggest metal exchange, suspended nickel trading after a dramatic price spike last March, outraging investors.

AQR Capital Management, DRW Commodities, Flow Traders, Capstone Investment Advisors and Winton Capital Management are seeking damages for their alleged losses.

Hong Kong Exchanges and Clearing, which owns the LME, insisted the claim ‘is without merit’. The LME is also facing a lawsuit from New York hedge fund Elliott Associates, which is seeking damages worth £379m, while Jane Street Global Trading is pressing for £12.7m.

Nickel trading was suspended after prices doubled to more than $100,000 a tonne in just a few hours – a surge that industry insiders have blamed on short-covering by a producer.

The UK’s financial watchdog, the Financial Conduct Authority, has launched a probe into the LME for possible misconduct.