Elliott Files New Claim Over 2022 Nickel Trading Incident; HKEX and LME Named Defendants
SingTao · 1 SOURCESabout 2 hours ago2 MIN
Summary
Hedge fund Elliott has initiated new legal proceedings against Hong Kong Exchanges and Clearing Limited (HKEX) and its subsidiary London Metal Exchange (LME), continuing its long-running dispute over the controversial 2022 cancellation of nickel trades. The fund filed its claim with the UK Competition Appeal Tribunal on September 3, naming both exchanges as defendants in an action alleging violations of Chapter 2 of the UK Competition Act 1998, which prohibits the abuse of market dominance .
In a stock exchange announcement released on September 8, HKEX confirmed it had received notice of the proceedings but stated that it has not yet been formally served with the legal documents. Under UK legal procedures, Elliott must first obtain tribunal permission before serving documents on HKEX; even if such permission is granted, HKEX has indicated it would challenge the permission application further .
Key Points
- Elliott alleges HKEX and LME failed to implement proper systems and arrangements to prevent disorderly trading during periods of severe market stress in the nickel market
- The fund claims both exchanges neglected to adequately monitor and manage volatility in LME nickel futures contract markets
- Elliott alleges the exchanges failed to identify and manage conflicts of interest, and did not operate their systems transparently, objectively, and proportionately
- UK courts have previously ruled in favor of LME, with both the Court of Appeal in 2024 and an earlier Divisional Court confirming the 2022 nickel market actions were lawful and compliant with LME rules
- Elliott has itself acknowledged that the disputed actions were legal from a public law perspective, yet continues pursuing damages through this alternative legal pathway
Why It Matters
This case underscores the far-reaching consequences of the 2022 nickel market crisis, which saw LME cancel billions of dollars worth of trades at the height of a price surge, drawing regulatory scrutiny and multiple legal challenges. For Hong Kong investors and market participants, the outcome could set important precedents regarding the legal responsibilities of exchanges during extreme market conditions and their liability for market-wide interventions .
This case underscores the far-reaching consequences of the 2022 nickel market crisis, which saw LME cancel billions of dollars worth of trades at the height of a price surge, drawing regulatory scrutiny and multiple legal challenges. For Hong Kong investors and market participants, the outcome could set important precedents regarding the legal responsibilities of exchanges during extreme market conditions and their liability for market-wide interventions .