Elliott Investment Management has filed a fresh lawsuit against the London Metal Exchange, this time alleging that the exchange’s chaotic handling of the 2022 nickel crisis violated UK competition rules. The claim, brought through affiliates Elliott Associates L.P. and Elliott International L.P., also names the LME’s parent company, Hong Kong Exchanges and Clearing (HKEX), as a defendant.
The nickel crisis, briefly explained
On March 8, 2022, the nickel market went completely haywire. Prices surged from roughly $30,000 per metric ton to over $100,000 in a matter of hours, driven by a massive short squeeze. The LME responded by suspending trading and then cancelling all trades executed that morning. The annulled transactions totaled approximately $12 billion in notional value.
For firms like Elliott that had been on the winning side of those trades, the cancellation effectively erased enormous profits. Elliott originally sought around $456 million in damages through a judicial review filed in June 2022, arguing the LME had no right to wipe the slate clean.
Why the first lawsuit failed
Elliott’s initial legal strategy ran into a wall, repeatedly. The UK High Court ruled in November 2023 that the LME’s actions were lawful. The Court of Appeal upheld that decision in October 2024. And in January 2025, the Supreme Court denied Elliott permission to appeal further, effectively slamming the door on that particular legal avenue.
Other hedge funds that had filed parallel claims, including AQR and DRW, withdrew their own cases in 2025 after watching Elliott’s litigation reach a dead end.
The new angle: competition law
The fresh claim pivots to an entirely different legal theory. Rather than arguing the LME exceeded its authority, Elliott is now alleging that the exchange’s conduct breached UK competition regulations.
In March 2025, the Financial Conduct Authority hit the LME with a £9.2 million fine (roughly $11.9 million) for failures in how it managed the market disruptions. That penalty marked the FCA’s first-ever enforcement action against a UK exchange.
Elliott has indicated it is reviewing the FCA’s findings, which could provide fresh ammunition for its legal arguments.
HKEX, which acquired the LME in 2012 for $2.2 billion, faces reputational exposure from the continued litigation regardless of the outcome.
For Elliott, the fund believes it was owed money on legitimate trades that were arbitrarily voided. Having exhausted one legal theory, it’s now testing another. The fund once spent over a decade pursuing Argentina’s government over defaulted bonds, eventually collecting more than $2 billion.