Battle: David Harding with wife Claudia
Billionaire philanthropist David Harding has waded into a legal battle against one of London’s oldest exchanges.
Harding’s Winton Capital Management has teamed up with other hedge funds after the London Metal Exchange (LME) halted billions of pounds of nickel trades in March.
The debacle, the result of mounting sanctions against Russia after its invasion of Ukraine, sparked fury on Europe’s last open outcry trading floor. The controversial cancellations took place after prices shot up by more than 50 per cent in hours.
This led to many traders missing out on lucrative profits, but potentially saved China’s largest steel company, Tsingshan Holding Group, which was on the losing end of a significant short position.
The scandal has triggered nearly £400m of legal claims from Elliott Management and trading firm Jane Street, both seeking a judicial review into the legality of LME actions.
US firms AQR Capital Management and Capstone Investment Advisors have been named in a separate claim with Harding, a physicist-turned-financier who is almost as well known for giving money away as he is making it. He gave £100m to his alma mater, the University of Cambridge.
He founded Winton in 1997. Court documents have revealed the severity of claims facing the LME, which has been accused of withholding private conversations around its controversial suspension.
Questions are also being asked about JP Morgan’s role.
It has been described by City sources as the ‘main dealer-broker’ on the trades but a source close to JP Morgan has said it had no influence over the LME’s decision-making.
An upcoming High Court hearing will determine whether the historic exchange must hand over information.
AQR said: ‘Given the circumstances surrounding the suspension, the unprecedented decision to cancel agreed-upon trades in these circumstances, and the LME’s piecemeal disclosures regarding its actions, the applicants seek disclosure of certain documents from the LME to enable them to assess their legal position.’
An LME spokesman said: ‘We consider that application to be without merit, and we look forward to setting out our arguments opposing the application in due course.’