The Financial Times reports that lawyers representing the former head of cotton at Glencore, Mark Allen, took on cotton merchant Louis Dreyfus Commodities in a New York court yesterday in a landmark case for global cotton trade.
Anglo-Swiss giant Glencore – which lost over $300 million on cotton in 2011 – has not joined the case, with Mr Allen going it alone in his market manipulation claims against Louis Dreyfus.
Gyrations
The litigation has shaken up an industry where disputes are typically settled before arbitration panels rather than judges.
The case centres on so-called gyrations between May and July 2011, with Mr Allen alleging that Louis Dreyfus manipulated and inflated the price of futures by building a confident position in the market at substantially higher prices than those prevailing in the physical market.
High-profile commodities lawyer Cristopher Lovell is arguing the case for the plaintiff, while leading Wall Street derivatives lawyer Kenneth Raisler is among those defending Louis Dreyfus, which has petitioned Judge Andrew Carter Jr to dismiss the lawsuit. A ruling is pending.
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