JPMorgan Owned the LME ‘Nickel’ That Was Actually Bags of Stones

JPMorgan Chase & Co. owned the London Metal Exchange nickel contracts that turned out to be backed by bags of stones rather than metal, according to people familiar with the matter.

The LME last week announced it had canceled nine nickel contracts — worth about $1.3 million — after discovering “irregularities” at a certain warehouse, which Bloomberg has reported was owned by Access World. The news has been met with shock in the metals world, because LME contracts are generally viewed as beyond question.

JPMorgan was the owner of the nine invalidated contracts, according to people familiar with the matter. ...