The Daily Telegraph

Metal exchange faces hedge fund lawsuit

- By Oliver Gill

SIR David Harding, the hedge fund manager who bankrolled the pro-eu “Britain Stronger in Europe” campaign, is among a pack of investors to file new legal action against the London Metal Exchange.

London-based Winton Capital, which Sir David founded in 1997, has launched pre-action proceeding­s against the LME after the 145-year-old exchange – owned but the Hong Kong Stock Exchange – cancelled billions of pounds of trades earlier this year as nickel prices surged.

High Court filings reveal Winton’s action is made alongside AQR Capital Management, Capstone Investment Advisers, Flow Traders and DRW Commoditie­s.

They follow a $500m (£439m) claim against the LME by US hedge fund Elliott Management and Jane Street made earlier this year.

The LME cancelled trades on the morning of March 8 after nickel prices surged 250pc over the course of two days. Chinese investors were on the losing side of the trades with hedge funds in line to book big profits.

Winton claimed the decision to cancel the trades “caused significan­t losses for many market participan­ts”.

A spokesman for the firm added: “The applicants seek disclosure of certain documents relating to the LME Group decision making bodies and relevant communicat­ions with market participan­ts, to enable us to assess our legal position.”

A spokesman for the LME said: “We look forward to set- ting out our arguments opposing the applicatio­n in due course.”

Elliott’s legal claim alleged that the LME broke the law by exceeding its powers by cancelling the trades.

The LME said at the time that Elliot’s claim was “without merit and the LME will contest it vigorously”.

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