![]() Red Kite said in the court filing that staff from the two Barclays' divisions also shared information when they socialised together. Anyone found in breach of LME rules could be subject to disciplinary proceedings." "The LME has strict rules regarding market manipulation and abuse. The LME, owned by Hong Kong Exchanges and Clearing Ltd, declined to comment specifically on the legal case, but referred to its regulations. The bank sought to "manipulate the LME by 'ramping' prices in a manner favourable to Barclays" during closing trading, the hedge fund said in the court filing. "Futures Clearing was on a different floor to the Commodities Division, in a segregated area of the floor with specific entry restrictions," Barclays said in its defence document. were able to and did anticipate the Red Kite Funds' future market behaviour," the court filing said.īarclays denied that its traders were able to access Red Kite's confidential information. "Being able to see the Red Kite funds' orders and open positions, traders with the Commodities Division (of Barclays). ![]() Red Kite said in the court filing that Barclays' proprietary traders were able to see the hedge fund's confidential trading positions on the London Metal Exchange (LME) that were being executed by another division of Barclays.Īs a result, Barclays traders executed trades based on that inside knowledge which resulted in profits for Barclays but damaged Red Kite's stance, the hedge fund said. The Red Kite Group, which has hedge funds, physical trading and mining finance, has about $2 billion of assets under management, according to its website. Red Kite did not respond to Reuters' requests for comment.ĭuring the period covered by the case, copper prices surged to a peak of just over $10,000 a tonne in 2011, one of the boom years for commodities, driven by China's appetite for raw materials to build infrastructure.Įxcess supply later pushed prices to a low of about $4,300 by early last year. Red Kite agreed when signing the bank's terms of business that "Barclays would remain free to have interests and duties adverse to the interests of the proprietary (Red Kite) funds," the bank's defence document said. ![]() "Barclays had detailed policies and procedures in place for protecting confidential information, in particular that of its clients," it said in the document.īarclays said its executives only used Red Kite's confidential information on its market positions for legitimate business purposes, such as assessing the fund's credit exposure to the bank. The initial legal documents were filed in Britain's High Court in October last year but only recently made public.īarclays has denied the claims in a court filing. In court papers, Red Kite alleges that Barclays committed market abuse by manipulating market prices and using information from Red Kite about the hedge fund's copper positions from 2010 to 2013 to take lucrative opposing trades on metals markets. ![]() The case pits one of the world's biggest metals hedge funds, whose co-founder Michael Farmer was a former treasurer of Britain's Conservative Party, against one of Europe's biggest investment banks. LONDON, Oct 23 (Reuters) - Hedge fund Red Kite has filed a lawsuit against Barclays Plc, alleging the bank manipulated the copper market to its advantage, causing the hedge fund to lose $850 million. * Barclays accused of "ramping" up closing LME prices
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