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| Nickel |
Legal claims totaling $600 million dropped after UK courts uphold LME’s emergency intervention during price surge
Several hedge funds have withdrawn legal actions against the London Metal Exchange (LME) related to its controversial cancellation of nickel trades during the March 2022 market crisis, easing pressure on the world’s oldest metals bourse.
Among the claimants were major funds such as AQR Capital Management, DRW Commodities LLC, and Pala Investments Ltd., which had sought more than $100 million in damages. Their lawsuits had been on hold, pending the outcome of Elliott Investment Management’s parallel claim, which was dismissed after the UK Supreme Court refused a final appeal earlier this year.
LME Wins in Court, Faces Regulatory Fine
The LME faced intense criticism for canceling $12 billion in nickel trades to prevent what it described as a “death spiral” in prices triggered by a short squeeze. The bourse argued the move was necessary to avert mass bankruptcies across the metals sector. While UK courts upheld the legality of the LME’s actions, the Financial Conduct Authority (FCA) in March fined the exchange £9.2 million ($11.9 million) for inadequate systems and crisis controls.
In its 2024 annual report, the LME noted that Elliott and Jane Street, which brought the original case, had already paid over £4 million in interim legal fees. With the Supreme Court’s refusal to allow an appeal, the exchange considers Elliott’s challenge effectively closed.
LME Rebounds with Strong Financials and Trading Volumes
Despite reputational damage, the LME has shown signs of recovery. In 2024, trading volumes jumped 18%, reaching the fourth-highest level on record. Pre-tax profits for the LME and its clearinghouse LME Clear soared to $193 million, a 68% increase year-on-year.
The dropped lawsuits mark a turning point for the exchange as it continues to rebuild trust while implementing improved oversight and risk management measures.
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