Commodities hedge fund RK Capital Management has lost its bid to stop a copper exchange-traded fund that it warned could "wreak havoc on the U.S. and global economy."
The Securities and Exchange Commission last week approved a rule change at NYSE Arca that will allow the launch of a physical copper ETF. That fund will be launched by JPMorgan Chase, but is expected to be followed by two others, from BlackRock and ETF Securities.
RK, which runs the Red Kite hedge funds, has been fighting against the ETF for much of the year, joined in its opposition by several major copper users. They, and Sen. Carl Levin (D-Mich.), warned that the copper ETFs would inflate prices and harm supply.
The SEC rejected those arguments, finding in a review last month that the ETFs were not likely to have a major impact on copper prices.