Jane Street, one of the world’s biggest market makers, has sued the London Metal Exchange, as international groups increase pressure on the exchange following its decision to cancel a nickel trading day in March.
Jane Street on Wednesday filed a lawsuit against the LME and its clearing house, seeking $15.34 million, LME owner Hong Kong Exchanges and Clearing said on Tuesday.
The move follows a $456 million claim made by US activist group Elliott Management, which was revealed by HKEX a day earlier.
The legal action puts further pressure on the 145-year-old stock exchange, which is battling to repair its reputation as UK financial regulators scrutinize its handling of the crisis.
The decision to suspend trading on March 8 came after nickel jumped 250% in just two days to briefly trade above $100,000 a ton. The price spike was triggered by a short squeeze as banks and brokers rushed to close part of a large position accumulated by Xiang Guangda, the billionaire founder of China’s top stainless steel producer Tsingshan Holding Group.
International funds including AQR, one of the world’s largest hedge funds, accused the LME of cronyism over the move, leading the LME to deny that parent company HKEX had influenced it.
The LME will contest the request “vigorously” and considers it “without merit”, HKEX said.
“The LME’s arbitrary decision to cancel nickel trading during a time of heightened volatility seriously undermines the integrity of the markets and sets a dangerous precedent that calls future contracts into question,” Jane Street said in a statement. , adding that she had taken steps for “the recovery is the loss” caused by the decision.