Elliott Considers Further Action Against London Metal Exchange Following FCA Fine
Elliott Associates, a U.S.-based hedge fund, is reviewing its options for further legal action against the London Metal Exchange (LME) after Britain’s Financial Conduct Authority (FCA) fined the exchange £9.2 million ($11.9 million) for its handling of the 2022 nickel price crisis. The fine, announced on March 20, 2025, marks the first enforcement action against a UK investment exchange.
The controversy stems from March 2022, when nickel prices surged to over $100,000 per tonne within hours, triggering chaos in global markets. The LME responded by suspending trading and voiding $12 billion worth of nickel trades, a move that sparked lawsuits from investors, including Elliott, who claimed significant financial losses. Elliott’s lawsuit was dismissed by UK courts last October, with judges ruling that the LME acted lawfully to stabilize the market.
Despite losing its case and being denied permission to appeal further by the Supreme Court in January 2025, Elliott stated that the FCA’s findings vindicate its position. The FCA concluded that the LME failed to adequately prepare for severe market stress and relied on untrained junior staff during critical trading hours. These shortcomings undermined market confidence and contributed to extreme volatility.
The nickel price spike was partly driven by fears of supply disruptions following Russia’s invasion of Ukraine. Nickel is a key component in stainless steel and electric vehicle batteries, making it vital for global industries. The crisis highlighted vulnerabilities in commodity markets and prompted calls for stronger regulatory oversight.
While Elliott has not disclosed specific details about potential further action, it emphasized that the LME’s failures caused material harm to investors. The hedge fund’s spokesperson noted that it is carefully reviewing the FCA’s final notice before deciding on next steps.
