The collapse of investor appetite for commodities has ended the threat of a pair of proposed exchange-traded funds bitterly opposed by hedge fund RK Capital Management.
The proposed physical-copper ETFs, planned by BlackRock and JPMorgan Chase, were approved late last year by the Securities and Exchange Commission, over the objections of RK, which runs the Red Kite hedge funds, and several major industrial copper users. The SEC's move sparked a lawsuit by one of those allies, copper-wire maker Southwire Co.
But Southwire last week dropped that complaint, because it had in effect already won. The company said that the launch of the two ETFs had become unlikely, rendering its legal challenge moot.
Red Kite had warned that the copper ETFs would "wreak havoc on the U.S. and global economy" by removing copper from the market.