Overview

• The Financial Conduct Authority (FCA) imposed its first-ever fine on a UK-recognized investment exchange, citing the LME's inadequate systems and controls during the 2022 nickel price surge.
• Nickel prices skyrocketed to over $100,000 per tonne on March 8, 2022, driven by supply concerns linked to Russia's invasion of Ukraine and potential sanctions on Russian producers.
• The LME suspended trading for eight days and controversially canceled trades to stabilize the market, a decision later upheld as lawful by the Court of Appeal in October 2024.
• The FCA criticized the LME for relying on inadequately trained junior staff and disabling price bands, which exacerbated market instability during the crisis.
• The LME accepted the FCA's findings, implemented enhanced risk management controls, and received a 30% fine reduction for its cooperation with the investigation.