All those affected by LME scandal and Wisdomtree 3X Nickel ETP 3NIL Closure on 21st March 2022

Freedommm

Background articles:

WWW  cnbc.com/2022/06/07/london-metal-exchange-hit-with-two-us-lawsuits-over-nickel-trading-chaos.html

and

www  bloomberg.com/news/articles/2022-03-22/nickel-investors-wiped-out-again-as-wisdomtree-shuts-second-fund

In short, I've lost my entire profits and principal capital when LME decided to retrospectively cancel Nickel trades on 8th March 2022.  When Nickel market did not function, Wisdomtree decided to steal my entire investment as "compulsory redemption". I've lost my entire investment in 3NIL - 3X Leveraged Nickel ETP that was under compulsory redemption.  The profits on 8th March would have been about 6x my original investment made a day prior! I was not allowed to sell my shares on that day. There is currently a massive lawsuit vs LME by two US-based funds (see above). FSA and FRA are conducting a "review" of the LME scandal. However, I'm one of retail investors and I wish to claim my money for their illegal actions, that's both LME and Wistomtree.  Both of them just sent me general "bureaucratese" brush-off emails.

I spoke to a few lawyers. Only some are financially literate enough but they want large fees upfront. This really needs to be a class action, a group litigation claim for compensation.  The Ombudsman said this is not under their overseeing, while FCA won't said that generally this is an "unregulated product". It is tragic failure of system in this country to say the least. I'm obviously not the only one who believes that, because many large financial institutions have suffered greatly, and those two funds above are pursuing compensation as we speak.

Really, I don't know who to turn to for some help. Who else is affected? Do you know lawyers who will bring on the class action / group litigation?

[Please be respectful]

Malthusian

In short, I've lost my entire profits and principal capital when LME decided to retrospectively cancel Nickel trades on 8th March 2022.  

Respectfully, you lost your money because you invested in a high-risk product that aims to produce 3x the price movement of nickel. Nickel dumped 35% so you lost 100%.

The profits on 8th March would have been about 6x my original investment made a day prior! I was not allowed to sell my shares on that day.

The 6x profits were already gone when the nickel market shut down. 

People losing money in obscure high-risk investment products is not a failure of regulation, it's them doing what they say on the tin.

Class-action suits (multiple similar cases are combined into one case) are not possible in the UK. Group litigations (multiple similar cases are heard by the same judge and they use the same lawyer to avoid reinventing the wheel) are.

Very few MSE regulars gamble on high-risk leveraged products so I doubt you will find anyone here interested in joining such a case. A forum aimed at people who gamble on high-risk financial products would be a better bet. 

I suspect that only a handful of retail investors in the UK suffered this kind of loss and most of them wouldn't be interested in joining a group action because even a share of the up-front fees would still dwarf their losses. But you don't need to take my word for it, finding a more appropriate forum would be the next step.

A more positive step would be to write off the money and at most wait and see how the bigger cases go. If the big boys successfully establish wrongdoing by the LME (which is very dubious) and are compensated for their losses, that would make it easier for you to bring a similar case. (Although it would likely still cost you a lot of money upfront and leave you with the risk of being worse off than you are now.) If the courts rule the LME did nothing wrong, then you get a free ride and save yourself a lot of money in legal fees.

Freedommm

LME did things very very wrong. 
Type www and a dot.  thisismoney.co.uk/money/markets/article-11129707/London-Metal-Exchange-legal-fight-heats-nickel-fiasco.html

Wisdomtree emailed me a few days before 21st March saying that there while there is no official price of Nickel they are trying to decide on what to so. LME only canceled trades after 8am on 8th March. A more reasonable thing to do would have been to revert to price as at 16:00 on 7th March if that. Nickel had not devalued, but as per LME - there was no official quotation possible 

wmb194

Freedommm said:

Background articles:

WWW  cnbc.com/2022/06/07/london-metal-exchange-hit-with-two-us-lawsuits-over-nickel-trading-chaos.html

and

www  bloomberg.com/news/articles/2022-03-22/nickel-investors-wiped-out-again-as-wisdomtree-shuts-second-fund

In short, I've lost my entire profits and principal capital when LME decided to retrospectively cancel Nickel trades on 8th March 2022.  When Nickel market did not function, Wisdomtree decided to steal my entire investment as "compulsory redemption". I've lost my entire investment in 3NIL - 3X Leveraged Nickel ETP that was under compulsory redemption.  The profits on 8th March would have been about 6x my original investment made a day prior! I was not allowed to sell my shares on that day. There is currently a massive lawsuit vs LME by two US-based funds (see above). FSA and FRA are conducting a "review" of the LME scandal. However, I'm one of retail investors and I wish to claim my money for their illegal actions, that's both LME and Wistomtree.  Both of them just sent me general "bureaucratese" brush-off emails.

I spoke to a few lawyers. Only some are financially literate enough but they want large fees upfront. This really needs to be a class action, a group litigation claim for compensation.  The Ombudsman said this is not under their overseeing, while FCA won't said that generally this is an "unregulated product". It is tragic failure of system in this country to say the least. I'm obviously not the only one who believes that, because many large financial institutions have suffered greatly, and those two funds above are pursuing compensation as we speak.

Really, I don't know who to turn to for some help. Who else is affected? Do you know lawyers who will bring on the class action / group litigation?

[Please be respectful]

Looks like one of the problems was in how this was set-up using swaps and so it isn't just a case of WisdomTree "stealing" your money as there were other counterparties involved so it doesn't look like it would be a simple case of WisdomTree making you whole again based on any wrongdoing on its part:

"The extreme and continual adverse movement in nickel prices since the 7 March 2022 has led to a restrike process being triggered on the morning of Monday 21 March 2022.  Please see the earlier announcement below for further details. During this restrike process the product’s value fell to zero, leading the swap counterparties to terminate the swaps underlying the product. The product will now be closed with a value of zero.

The limitation on trading imposed on the nickel market by the LME after 7 March 2022 led to severe disruptions in nickel trading and pricing, which prevented the product from being priced and resetting its leverage at the end of each day as usual.  This disruption is what led, as per the conditions of the Prospectus, to price movements triggering restrikes and knock-outs being measured from the close of 7 March 2022 rather than daily, as would otherwise be the case. "

The announcement mentions, "as per the... prospectus" so I'd read that to see whether there are any next steps that WisdomTree planned to take in this eventuality but to be honest I wouldn't get your hopes up.

https://www.wisdomtree.eu/en-gb/about-wisdomtree/important-notices#

https://www.wisdomtree.eu/en-gb/products/short-leveraged-etps/commodities/wisdomtree-nickel-3x-daily-leveraged

Including many popular ETFs, sites like ADVFN and LSE have forums for almost every British listed share you can think of but barring one comment on LSE they come up crickets for this one. I'm guessing that very few people owned it.

wmb194

A quick look at the prospectus doesn't fill me with hope as it seems like these sorts of things happen in these types of markets. This was a very high risk investment.

https://www.wisdomtree.eu/-/media/eu-media-files/key-documents/prospectus/etf-securities/prospectus---etfs-commodity-securities-limited-(short-,-a-,-leveraged).pdf

Freedommm

I'll join any LME lawsuit then. 

fwor

I don't have the inclination or need to check, but I'd be prepared to bet that the LME have their act together, and that any intervention that they may have made will have been well within their legal rights. Typically companies in that sort of industry do not have a "make it up as you go along" attitude, so they will have consulted their own lawyers before acting, I would expect.

Freedommm

Update. The is a commercial litigation specialist company that is currently preparing corporate lawsuit on LME, in addition to all those  suits already filed. That is, 100s of millions of pounds. They are also considering bringing Wisdomtree to justice on behalf of retail investors who have been robbed. I was informed that some people have actually sued Wisdomtree in the past and won compensation from them. It definitely wouldn't be the first time Wisdomtree get sued and not the first time they stole investors' money.
While they aren't yet committed to starting the legal action, they already have enough retail investors lost capital to make it worthwhile!
"Market Disruption" days do NOT make theft and fraud legal.

Freedommm

The situation is still developing. FCA upgraded LME procedures to "enforcement investigation". They must have found some very serious evidence. Moreover, LME is currently being sued by many corporate entities and recently was exposed to two more Nickel scandals, namely fraud that affected Trafigura with fake Nickel for 577m and literally bags of stones instead of Nickel at Rotterdam warehouse. LME actually have a web page, dedicated to numerous lawsuits against them (!!!)

https://www.lme.com/en/lme-nickel-litigation

https://www.bloomberg.com/news/articles/2023-03-20/jpmorgan-owned-the-lme-nickel-that-was-actually-bags-of-stones

Notice how every new scandal at LME is about Nickel, in particular. But is there any lawyer that represents retail investors to seek full compensation from Wisdomtree and/or LME ?

masonic

Freedommm said:

But is there any lawyer that represents retail investors to seek full compensation from Wisdomtree and/or LME ?

I'm sure there are many lawyers who could take up such a case, but they'd need to be instructed by a client or clients. The normal procedure when a group of investors feels wronged by something a firm has done is to form a group and crowdfund the legal action within that group or the wider class of investors. This forum is probably not the best place to find others who invested in this product, because anyone expressing a desire to invest in a leveraged ETF here would likely have been given a reality check. However, there must be at least a small number of others out there (this is not a mainstream investment product, and would be considered unsuitable for retail investors, so there won't be many), it would just be a case of finding them. Alternatively you could seek to be joined to one of the existing legal claims that is ongoing. You would likely need to pay a share of the costs accumulated so far in order to do so.

As this is a moneysaving forum, it probably should be stated that money spent on legal action could well be good money thrown after bad.

Freedommm

masonic said:

Freedommm said:

But is there any lawyer that represents retail investors to seek full compensation from Wisdomtree and/or LME ?

I'm sure there are many lawyers who could take up such a case, but they'd need to be instructed by a client or clients. The normal procedure when a group of investors feels wronged by something a firm has done is to form a group and crowdfund the legal action within that group or the wider class of investors. This forum is probably not the best place to find others who invested in this product, because anyone expressing a desire to invest in a leveraged ETF here would likely have been given a reality check. However, there must be at least a small number of others out there (this is not a mainstream investment product, and would be considered unsuitable for retail investors, so there won't be many), it would just be a case of finding them. Alternatively you could seek to be joined to one of the existing legal claims that is ongoing. You would likely need to pay a share of the costs accumulated so far in order to do so.

As this is a moneysaving forum, it probably should be stated that money spent on legal action could well be good money thrown after bad.

How to go about finding those other people, wronged by this matter?