The decision to suspend trading in nickel contracts could be very costly for the London Metal Exchange. The US fund Elliott Management has filed a lawsuit asking for 425 million euros for the damages caused by the measure, taken in the midst of chaotic weeks in which the price of this material skyrocketed after the sanctions against Russia, one of the world’s largest producers. A ton of nickel reached 100,000 dollars and doubled its price before on March 8, those responsible for the floor decided to cut their losses and close it for just over a week to curb the high volatility.
At the reopening, on March 16, the operation did not improve. The London Metal Exchange (LME, for its acronym in English) set limits of 5% up and down to artificially prevent such wild movements, but there were technical failures that infuriated investors. These thresholds were progressively increased, and nickel suffered falls that returned its price to more normal levels —around 28,000 dollars—, although historically high.
Now, Elliott Management, a Florida-based fund founded by billionaire Paul Singer, -which has just closed a lucrative sale of AC Milan from the Italian series A for 1,200 million euros to the venture capital group RedBird- alleges in his claim before the British courts that the stoppage of transactions was “unlawful on grounds of public law and/or constituted a violation of the plaintiffs’ human rights.”
It is not the first time that the entity led by Singer, with a reputation for tough and aggressive, has resorted to justice to defend its interests. He had a 15-year lawsuit with Argentina to pay his bonuses, something he ended up getting in 2016, when he finally got 2.1 billion euros. Along the way, he managed to retain the Argentine Navy’s flagship frigate for 70 days in 2012 in a port in Ghana. And he put the then president of the country, Cristina Fernández de Kirchner, in enormous logistical trouble. Between 2007 and 2010, the Argentine government had to cancel several flights of its official plane to the US and Germany so that it would not be embargoed.
The Hong Kong Stock Exchange —Hong Kong Exchanges and Clearing—, owner of LME, has announced that it will defend itself against the accusations, which it considers unfounded. The entity bought the London Metal Exchange – the only one where investors can still trade openly – in 2012 for 1.7 billion euros. Now, its operating problems not only face possible millionaire disbursements, but have also placed it in the sights of regulators.
He knows in depth all the sides of the coin.