Hedge fund Elliott Investment Management has initiated a new legal battle against the London Metal Exchange concerning the March 2022 nickel crisis. The firm contends that the LME did not disclose vital documents that could shed light on how the exchange might have addressed the severe short squeeze. This move reignites the legal dispute surrounding the LME's decision to cancel approximately $12 billion worth of nickel trades.
Elliott's new argument, presented in the Court of Appeal on July 9, 2024, asserts that the LME's chief executive disregarded the findings of his own monitoring teams before making the significant decision to void the nickel transactions. The hedge fund has been actively challenging the LME's actions, claiming that its handling of the crisis was unlawful.
This latest legal action follows a previous defeat for Elliott, where two UK courts upheld the legality of the LME's decision to cancel trades. Just recently, on March 20, 2025, Elliott was denied permission to appeal its case to the UK Supreme Court. Despite these setbacks, Elliott has stated that it is considering further actions against the LME, especially after a regulatory watchdog imposed a fine on the exchange for its role in allowing nickel prices to spiral out of control. Elliott is seeking $456 million in damages from the LME.
The LME's decision to cancel trades in March 2022, which reversed several hours of transactions, was aimed at stabilizing the market during an unprecedented price surge. However, this action drew widespread criticism from various market participants, including Elliott. The ongoing legal challenges underscore the lasting impact and controversy surrounding the LME's intervention in the nickel market.
