LME Faces Rare UK Probe Into Conduct During Nickel Crisis
- FCA enforcement investigation could lead to fines for the LME
- BOE says LME Clear must improve governance, to appoint monitor
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The UK markets watchdog opened an investigation into the London Metal Exchange focusing on potential misconduct during last year’s massive nickel short squeeze, escalating pressure on the embattled exchange and raising the prospect of financial penalties.
The probe by the Financial Conduct Authority’s enforcement division is the first public action of its kind targeting a UK exchange, and will focus on the LME’s actions, systems and controls in the run-up to the suspension of the nickel market a year ago. The Bank of England, which regulates the LME’s clearinghouse, said separately that its governance and risk management must be improved, and that it plans to appoint an independent monitor.