Copper Companies File Court Challenge on Copper ETF PlanJoe Richter
Encore Wire Corp. and Southwire Co. asked a U.S. court to review a regulatory decision that cleared the way for JPMorgan Chase & Co.’s planned exchange-traded fund backed by copper.
The copper fabricators said that the order by the Securities and Exchange Commission in December will “lead to an investor-financed squeeze of the market” for copper, according to a petition filed today with the U.S. Court of Appeals in Washington. The companies will seek to have the SEC decision vacated.
“This petition preserves the right to challenge the SEC ruling, and sets the process in motion,” Robert Bernstein, a lawyer at Eaton & Van Winkle LLP in New York, the firm representing the copper companies, said today in a telephone interview.
Industrial copper users including Encore, based in McKinney, Texas, and Southwire last month urged the SEC to reverse its decision. The group has said that the JPM XF Physical Copper Trust, the first U.S. exchange-traded fund backed by physical metal, would leave less for manufacturers, creating shortages and boosting prices.
The shares of Encore have climbed 23 percent in the past 12 months. Closely held Southwire is based in Carrollton, Georgia.
Jennifer Zuccarelli, a spokeswoman at New York-based JPMorgan, declined to comment on the filing.