LME in court again, faces US$15.3 million suit from trading firm Jane Street Global for cancelling nickel futures trades
- The quantitative trading firm claims that LME’s decision to cancel its trades was unlawful and constituted a breach of its human rights
- Jane Street Global suit follows a US$456 million lawsuit filed by affiliates of American hedge fund Elliot Management on June 1
The London Metal Exchange (LME) is being sued for a second time in less than a week, as legal challenges mount over its decision to suspend and cancel nickel futures trades in March.
“The LME management is of the view that the claim is without merit and the LME will contest it vigorously,” Hong Kong Exchanges and Clearing (HKEX), the London bourse’s parent firm, said in an exchange filing in Hong Kong on Tuesday. “It should be stressed that the LME always acted in the interests of the market.”
Jane Street Global has offices in London, Hong Kong, New York and Amsterdam, according to its website. Quant trading firms rely on quantitative analysis and mathematical computations to identify trading opportunities across several markets.
LME said in the HKEX announcement on Tuesday that it had cancelled all trades executed after midnight on March 8 retrospectively in order “to take the market back to the last point in time at which the LME could be confident that the market was operating in an orderly manner”. Trading subsequently resumed on March 16 across all LME execution venues.
The lawsuit follows a recent visit to London by Nicolas Aguzin, HKEX’s CEO, who met LME executives to celebrate the 10th anniversary of its acquisition this month.
“I actually see the situation at LME as a great opportunity to implement certain market reforms. While this is definitely a big challenge, it is [also] a big opportunity,” Aguzin said.