Elliott Investment Management and Jane Street have been granted permission by a court in London to sue the London Metal Exchange (LME) over its cancellation of trades during a short squeeze in the nickel market in March, according to a report by Bloomberg.
In June, the two firms filed for a judicial review of the LME’s actions which saw the cancellation on billions of dollars of transactions and the suspension of nickel trading for a week following a huge price spike.
While the LME’s actions eased the strain on brokers who were facing huge margin calls, hedge funds and other traders had highly profitable contracts torn up. Elliott is now claiming damages of $456 million, while Jane Street is claiming $15 million, arguing that the cancellation of trades was unlawful.
The LME is also facing separate legal action from a group of firms including hedge fund AQR Capital Management LLC, which filed a commercial court claim in London in September.
