Trafigura May Have Been Fleeced for $577 Million in Nickel Fraud

Trafigura Group, one of the largest commodity traders in the world may have been defrauded as much $577 million in a fraud involving nickel and companies it believed were controlled by the metal’s trader Prateek Gupta. Nickel was party to a violent short squeeze last March when LME suspended nickel trading after Nickel prices roughly doubled to all-time highs up 500% in a day. Nickel soared over $100,000 a ton to an all-time high on the London Metal Exchange when prices surged around $40,000 in just one hour. The metal has been hot with its use in the energy transition trade.

The Swiss trading group believed they were buying containers full of nickel. However, that was not the case and Trafigura said they were the victim of a “systemic fraud” that could cost it more than half a billion dollars. Trafigura said it had been defrauded by companies it believed were controlled by the metal’s trader Prateek Gupta, who didn’t immediately respond to requests for comment according to The Wall Street Journal. The Gupta companies included TMT Metals and subsidiaries of UD Trading Group. TMT and UD.

Trafigura said the alleged fraud revolved around boxes sold by TMT Metals, units of UD Trading Group, and others it didn’t name, which were purportedly full of nickel. But when Trafigura began to examine some of the containers in December, they didn’t contain the metal.

Trafigura said there was no evidence to suggest any of its employees were involved, and that it had been duped by false documents. Trafigura said Thursday that most shipments hadn’t yet been inspected, because they were still in transit.

Source: WSJ

From The TradersCommunity News Desk