U.S. copper fabricator ends fight against JPM, BlackRock funds
By Josephine Mason
NEW YORK (Reuters) - U.S. copper fabricator Southwire Co dropped its legal fight against physical copper funds planned by Wall Street banks, as political and regulatory scrutiny make it unlikely the exchange-traded funds will ever be launched, according to a court filing on Monday.
Southwire filed the lawsuit eight months ago after JPMorgan Chase & Co (JPM.N: Quote) and BlackRock Inc (BLK.N: Quote) got approval from the U.S. Securities and Exchange Commission for the first U.S. funds that would use copper as collateral against shares.
The prospect of the copper ETFs had spooked industrial users who worried the funds would hoard a vast stockpile of metal off the market, starving them of raw material and driving up prices.
At the same time, U.S. politicians called for more regulation and scrutiny of the multibillion-dollar commodity trading businesses of Wall Street banks. JPMorgan and others are now trying to sell off those businesses.
The dramatic change in circumstances surrounding the funds and their owners have make it less likely than ever that they would be launched, said Monday's filing to the U.S. Court of Appeals in Washington, D.C.
"Rapidly changing market conditions now make it unlikely that the orders being challenged will lead to the listing and trading of shares," said Robert Bernstein, an attorney at law firm Eaton & Van Winkle LLP which represents Southwire.
JPMorgan and BlackRock declined to comment. The SEC did not respond to requests for comment.
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