LONDON – Hedge fund AQR Capital Management and four other parties are due to ask a British judge on Friday to force the London Metal Exchange (LME) to release documents about decision-making that led the LME to suspend nickel trading in March.
AQR and others filed legal action in September after a wild price spike in nickel spurred the LME to cancel deals worth billions of dollars, which they said led to “significant losses” for market participants.
The other claimants in the filing at the London Commercial Court were Winton Capital Management, Capstone Investment Advisors, Flow Traders and DRW Commodities.
The LME was forced to halt nickel trading and cancel trades in early March after prices doubled to more than $100,000 per tonne in a surge sources blamed on short covering by one of the world’s top producers.
AQR and the others said the LME had made only “piecemeal disclosures” and demanded more documents, which will be the subject of the hearing at 1400 GMT.
The exchange, the world’s oldest and largest market for industrial metals, has rejected the legal action as without merit.
The LME is also facing lawsuits from US hedge fund Elliott Associates and Jane Street Global Trading, which are suing the LME for $456-million and $15.3-million, respectively, for the cancelled nickel trades.
British financial regulators launched a sweeping investigation in April of the suspension of nickel trading while the LME also commissioned its own independent review of the matter.
The LME is owned by Hong Kong Exchanges and Clearing Ltd.
