LME asks US court to dismiss ‘absurd’ aluminium lawsuits

The London Metal Exchange has asked a US judge to dismiss claims of misconduct related to the aluminium market for a variety of reasons, including that the court lacks jurisdiction over the exchange.

Three consolidated complaints against the exchange should be dismissed “for a lack of personal jurisdiction and for a failure to state a claim”, the LME said in a filing on April 23 in the US District Court in New York.
“The complaints fail to allege any basis for the court to exercise personal jurisdiction over LME Holdings Ltd, and no such basis exists,” the filing said, citing the Foreign Sovereign Immunities Act.
“(LME) Holdings is not organized under the laws of the US and does not do business in the US. (LME) Holdings has no operations or physical presence in the US. [...] Plaintiffs do not even attempt to allege how a pure holding company with no employees, no services, and its only place of business in London participated in the alleged conspiracy,” it added.
A number of lawsuits filed by aluminium consumers in the USA allege that the LME and other companies, including Goldman Sachs Group, JPMorgan Chase & Co and Glencore Xstrata and their respective warehousing firms, conspired to delay deliveries of aluminium from certain warehouses for financial gain. These companies also filed motions to dismiss the antitrust claims this week.
Goldman Sachs, JPMorgan and the LME declined to comment to Metal Bulletin sister title AMM on the filings this week. Glencore did not immediately respond to a request for comment.
“Plaintiffs allege no direct evidence of a conspiracy between the LME and either the member defendants or warehouse defendants, and no facts that permit the inference that the LME is a hub of a conspiracy among either of the other sets of defendants,” the LME said, describing the claims that the LME conspired with Goldman Sachs to collaborate on load-out rates as bordering on the “absurd”.
“The complaints lack even a single factual allegation of improper conduct by (LME) Holdings. Though the complaints contain more than 1,066 paragraphs and 285 pages, they do not once allege that (LME) Holdings did anything,” the filing said.
It also stated that the LME does not control or influence aluminium market prices and does not exercise an alleged monopoly power.
Andrea Hotter
Twitter: @andreahotter 

Andrea Hotter



Andrea Hotter

April 25, 2014

04:30 GMT

New York