London Metal Exchange hit with two U.S. lawsuits over nickel trading chaos

cnbc.com:

LONDON — A second U.S. firm has sued the London Metal Exchange for $15.3 million over canceled nickel trades in March.

Jane Street Global Trading filed a judicial review claim in the English High Court on Monday, a memo from LME-owner Hong Kong Exchanges and Clearing (HKEX) confirmed.

The filing from the U.S. market maker comes just days after hedge fund Elliott Associates filed a suit for $456 million relating to the same chaotic morning in March.

The LME suspended trading activity and cancelled nickel trades on March 8 due to a spike in volatility, which saw nickel prices double to a record $100,000 per ton in the space of a few hours.

A spokesperson for Elliott confirmed that it has initiated judicial review proceedings against the LME.

«Elliott considers that when the LME cancelled Nickel trades on 8th March 2022 it acted unlawfully in that it exceeded its powers when it cancelled those trades, or that it exercised the powers that it did have unreasonably and irrationally in particular by taking into account irrelevant factors (including its own financial position) and failing to take into account relevant factors,» the spokesperson added.

In a statement Tuesday, Jane Street said it had taken action to recoup its losses caused by the LME's «illegal actions» and to «strengthen the exchange and restore the market's trust in it.»

«The LME's arbitrary decision to cancel nickel trades during a period of heightened volatility severely undermines the integrity of the markets and sets a dangerous precedent that calls future contracts into question.»

The wild trade in the nickel market in early March came around two weeks after Russia's invasion of Ukraine, which prompted supply fears that sent commodity prices spiralling