27 AUGUST 2014www.cityam.com
London Metal Exchange given immunity in aluminium lawsuit
Edited by : AL CIRCLE
1 min read
A US judge has dismissed the London Metal Exchange (LME) from a lawsuit in America which had accused it, along with a number of banks and commodities companies, of aluminium price-fixing.
District judge Katherine Forrest concluded that the LME was an “organ” of the UK government and was therefore exempt from legal action under the foreign sovereign immunities act.
Acknowledging her decision was “somewhat surprising and counterintuitive”, Forrest said the “decidedly public function of market regulation” undertaken by the metal exchange meant it should not be included in the price-fixing lawsuit.
The case against the banks and commodities companies alleges that they conspired together since May 2009 to slow down the supply of aluminium to the market by hoarding it, driving prices up. The LME is alleged to have profited from the storage of the backed-up metal, although it does not own the aluminium or warehouses.
“We continue to take action to manage queue-related issues in accordance with our obligations,” the LME said in a statement, adding it was pleased with the decision.
District judge Katherine Forrest concluded that the LME was an “organ” of the UK government and was therefore exempt from legal action under the foreign sovereign immunities act.
Acknowledging her decision was “somewhat surprising and counterintuitive”, Forrest said the “decidedly public function of market regulation” undertaken by the metal exchange meant it should not be included in the price-fixing lawsuit.
The case against the banks and commodities companies alleges that they conspired together since May 2009 to slow down the supply of aluminium to the market by hoarding it, driving prices up. The LME is alleged to have profited from the storage of the backed-up metal, although it does not own the aluminium or warehouses.
“We continue to take action to manage queue-related issues in accordance with our obligations,” the LME said in a statement, adding it was pleased with the decision.
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