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LME had nickel traded cancellation options, says Elliott lawyer

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The London Metal Exchange had better options than canceling billions of dollars in nickel trades in March last year when prices skyrocketed, lawyers for Elliot Associates and Jane Street Global Trading told a London court yesterday, according to a report from Reuters.

The London Metal Exchange (LME) had better options than canceling billions of dollars in nickel trades in March last year when prices skyrocketed, lawyers for Elliot Associates and Jane Street Global Trading told a London court yesterday, according to a report from Reuters.

The claim came during the first day of a three-day judicial review at the High Court where Elliot and Jane Street are seeking a combined $472 million in damages from the LME, claiming that the exchange acted unlawfully when cancelling the trades on the morning of 8 March last year.

Alternatives to cancelling the trades, which the LME argues was justified because $19.7 billion of margin calls would otherwise have led to the bankruptcy of multiple clearing members and created systemic market risk, included using a lower closing price of a day earlier to set margins for trades on 8 March – which would have resulted in additional margin calls of $570 million instead of $19.7 billion – or letting the trades stand but at adjusted the prices, which “would have avoided or adequately mitigated the perceived detrimental effects”, according to Elliott.

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