LME legal chief steps down as nickel crisis intensifies at embattled exchange
The London Metal Exchange (LME) has announced the upcoming departure of its legal chief, in another dramatic day for the embattled trading hub which is currently under review by the Financial Conduct Authority (FCA) and Bank of England (BoE).
Tom Hine, LME’s group general counsel and head of enforcement, will step down at the end of January after 17 years at the world’s oldest metal exchange.
He now intends to set up his own business.
He said: “I have greatly enjoyed my career at the LME. Watching the exchange develop over the last decade following the Hong Kong Exchanges and Clearing acquisition has been extremely rewarding – and I feel privileged to have played a part in that ongoing journey.”
Hines’ duties will now be overseen by the LME Group legal management team, which has been temporarily assuming his overarching responsibilities during a period of extended leave which began last September.
Chief executive Matthew Chamberlain said: “Tom was instrumental in the HKEX acquisition of the LME in 2012, as well as the LME’s warehousing reforms and related litigation wins and enforcement actions. His knowledge of the exchange, the clearing house and metals industry more broadly, have proven invaluable and he will be missed.”
His departure follows the exit of LME chair Gay Huey Evans earlier this month and the publication of Oliver Wyman’s blistering report into the exchange’s handling of the nickel crisis.
The report called for the LME to bring in risk and control functions to prevent market distortions, upgrade volatility controls and spend more time monitoring risks in the market.
This follows LME suspending nickel trading last March, after it opted to cancel $3.9bn of trades when nickel prices climbed above $100,000 per tonne, with the exchange determining they no longer reflected market value.
To this day, the nickel contract remains broken with volumes and liquidity sliding, leaving the industry without a global reference for prices.
LME and its clearing house remain under review by both the FCA and BoE.
The FCA is looking into how the exchange handled the situation while the BoE is looking into LME’s clearing house, LME Clear.
Its conduct during the crisis is also the centre of mega lawsuits brought by Elliott Investment Management and Jane Street.