London Metal Exchange Wins Legal Case Against Nickel Trading Suspension

Cases from Elliott Investment Management and Jane Street were both dismissed yesterday (29 November), after the judges said the exchange's executives should be granted wide discretion to make the urgent decisions they did.

Deep Dive: 'Little reason' to expect disruption to precious metals rally

On 8 March last year, LME suspended nickel trading after prices doubled to more than $100,000 per tonne, and retroactively cancelled $12bn of trades from the previous day.

Nickel trading resumed on LME on 16 March, but the move marked the biggest crisis to hit the exchange in decades.

The suspension occurred following a bet on falling prices from steel producer Tsingshan and market concerns about sanctions against Russia, following its invasion of Ukraine.

Following the decision, activist investor Elliott IM argued it had lost profits totalling about $456m, while Jane Street said it had lost $15m.

FCA opens enforcement investigation into LME nickel trading suspension

LME said the decision had confirmed that the actions taken in the nickel market in 2022 were "lawful, rational and in accordance with LME's rules".

"The judgment recognises LME's obligation to maintain orderly markets and its powers to intervene to this end, including by cancelling trades," it added.

In March 2023, the Financial Conduct Authority opened an enforcement investigation into LME's suspension, stating it would look into some of LME's "conduct and systems and controls in place" in the period between 1 January 2022 and the time of suspension on 8 March 2022.

RECENT NEWS

What Advisers Misunderstand About Protection

Protection is rarely rejected outright. More often, it is misunderstood. Most advisers recognise th... Read more

Gyrostat Market Outlook: Looking Beyond The 30-day Volatility Headlines

This outlook examines how financial markets are pricing risk rather than attempting to forecast market... Read more

Gyrostat Capital Management: The Hidden Assumption In Most Portfolios - Stability

Markets do not usually fail portfolios. Assumptions do. Most portfolios are built with car... Read more

Gyrostat February Outlook: Stewardship As Risk Reprices

This monthly outlook examines how financial markets are pricing risk, rather than attempting to forecast ... Read more

Gyrostat Capital Management: Why Risk Management Is Not About Predicting Risk

Why Risk Management is Not About Predicting Risk Financial markets reward confidence, but they punish certai... Read more

Gyrostat January Outlook: Calm At Multiyear Extremes

This monthly Gyrostat Risk-Managed Market Outlook does not attempt to forecast market direction. Its p... Read more