(Yicai Global) June 6 -- US hedge fund managers Elliott Associates and Elliott International are suing the London Metal Exchange for USD456 million over the March stoppage of nickel trading on the platform, which is owned by the Hong Kong Stock Exchange.

The pair are taking legal action against LME and clearing house LME Clear, claiming that the trading halt was unlawful and constituted a violation of their rights, the HKEX said in a filing today, adding that its management believe “the claim is without merit and the LME will contest it vigorously.”

Trading of all nickel contracts was halted in London on March 8 after prices surged almost three and a half times from the day before to USD101,365 a ton, and did not resume until March 16. It was the first time that the LME had suspended a metals market since 1985.

“Cancellations were made retrospectively to take the market back to the last point in time at which the LME could be confident that the market was operating in an orderly manner,” the HKEX said. “It should be stressed that the LME always acted in the interests of the market as a whole.

The UK Financial Conduct Authority and the Bank of England announced in April that they will conduct a review on the LME’s governance, market regulation, and risk management. The LME also appointed an independent body to look into the matter.

Editor: Futura Costaglione