Hedge fund Elliott Investment Management has reignited its legal dispute with the London Metal Exchange (LME) concerning the March 2022 nickel crisis. On July 9, 2024, Elliott argued in the Court of Appeal that the LME had withheld vital documents, which, if disclosed, could have demonstrated how the exchange might have handled the runaway short squeeze without resorting to the unprecedented cancellation of billions of dollars worth of nickel trades.
Elliott contends that the LME's chief ignored the assessments of his own monitoring teams before making the decision to void trades. This latest legal action follows a prior lawsuit Elliott filed against the LME in June 2022, seeking $456 million in damages for losses incurred due to the trade cancellations. That initial lawsuit had been dismissed by a lower court.
Despite the previous court verdict supporting the LME, Elliott is now challenging this decision, asserting that the LME's failure to disclose key information was a significant factor. The ongoing legal battle highlights the persistent fallout from the nickel crisis, which has led to criticism of the LME's handling of the situation and a period of low liquidity and volatility in the nickel market. The hedge fund's move suggests its determination to pursue compensation and accountability from the exchange.
