David Harding wades into legal battle with London Metal Exchange

Billionaire philanthropist David Harding has launched a legal battle against one of London’s oldest stock exchanges.

Harding’s Winton Capital Management is working with other hedge funds after the London Metal Exchange (LME) shut down billions of pounds worth of nickel in March.

The debacle, the result of escalating sanctions against Russia after the invasion of Ukraine, sparked anger on Europe’s last open trading floor. The controversial cancellations came after prices rose by more than 50 percent in hours.

This led many traders to miss out on lucrative gains, but potentially bail out China’s largest steel company, Tsingshan Holding Group, which was on the losing side of a significant short position.

The scandal has sparked nearly £400 million in legal claims from Elliott Management and trading firm Jane Street, both of which are seeking a judicial review of 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 known for giving money away as he earns it. He gave £100 million to his alma mater, the University of Cambridge.

He founded Winton in 1997. Court documents have revealed the seriousness of the claims made by the LME, which was accused of withholding private talks about its controversial suspension.

Questions are also asked about the role of JP Morgan.

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 on the LME’s decision-making.

An upcoming Supreme Court hearing will determine whether the historical exchange should hand over information.

AQR said: “Given the circumstances surrounding the suspension, the unprecedented decision to cancel agreed transactions in these circumstances, and the LME’s fragmentary disclosures about its actions, applicants are requesting disclosure of certain documents from the LME to allow them to establish their legal position.’

An LME spokesperson said: ‘We consider that application to be unfounded and we look forward to setting out our arguments against the application in due course.’