London Metal Exchange Fined £9.2m for Mishandling 2022 Nickel Market Crisis

The FCA penalized the LME for operational failures and inadequate controls during extreme market volatility caused by geopolitical tensions.

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.