By Matt Day
The U.S. Securities and Exchange Commission Monday asked a judge
to throw out a lawsuit challenging the regulator's approval of the
first copper exchange-traded fund.
Southwire Co. last month sued the SEC in federal court, arguing
that the agency had erred in its Dec. 14 approval of a copper ETF
planned by J.P. Morgan Chase & Co. (JPM).
In papers filed with the Court of Appeals for the District of
Columbia Circuit, the SEC said Southwire's suit was "premature"
because the company had already filed comments asking the agency to
review its December decision.
"The motion is without merit, and we will respond accordingly,"
said Robert Bernstein, a lawyer representing Southwire. He said the
SEC already had rejected Southwire's request to review the
regulator's decision allowing the copper ETF previously.
The proposed ETF would be the first U.S. product to store
physical copper on behalf of investors, and Southwire has argued
that the product would "lead to an investor-financed squeeze of the
market" for copper, limiting supply and artificially driving up
prices. The SEC has said the product was unlikely to disrupt copper
supply and prices.
Southwire Co., of Carrollton, Ga., is the largest U.S. producer
of copper wire. The company was originally joined in the lawsuit by
wire maker Encore Wire Corp. (WIRE).
Encore later asked to be removed from the case without
specifying a reason for the change.
The SEC has yet to approve J.P. Morgan's final prospectus, which
would pave the way for the shares listing on NYSE Euronext's (NYX)
Arca division.
Write to Matt Day at matt.day@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires