London Metal Exchange (LME) Clear has turned to a former London Stock Exchange chief executive to chair its operations, as the crisis-hit trading house scrambles to restore investor confidence after the nickel price controversy last year.
David Warren has been named the new chairman of the board – effective from 20 July – with the incumbent Marco Strimer set to step down at the end of his term.
He will instead stay on as director until the end of the year, helping to smooth over the transition.
New hire Warren has three decades of experience in the financial sector, and is a former interim chief executive and chief financial officer of the London Stock Exchange.
He has also worked stateside as chief financial officer and senior advisor at NASDAQ.
This is just the latest reshuffle across the body’s senior management, with the LME’s trading platform replacing its legal counsel and chair earlier this year.
James Cressy, interim LME Clear chief executive said: “I’m delighted to welcome David and look forward to working alongside him. His deep knowledge of financial infrastructure and considerable international experience at both executive and non-executive level will stand the board in good stead as we look to enhance and further strengthen our clearing capabilities.”
LME under pressure over nickel price crisis
The LME has been at the centre of controversy after it suspended trading on 8 March last year, when prices hit record highs of $100,000 per ton – driven by a failed short attempt by Chinese billionaire and Tsingshan Holdings owner Xiang Guangda.
It then later decided to cancel eight hours of trades worth a combined sum of $3.9bn, as it determined prices no longer reflected market conditions.
This decision triggered lawsuits from two investors who lost out from the decision – Elliott Investment Management and Jane Street.
Their cases were heard in court last month – with a verdict expected in the autumn.
Demand for nickel has boomed over the last decade as car companies scramble to secure supplies to make batteries for their new ranges of electric vehicles.
Trading was subsequently suspended for over a week, before the LME attempted to re-open nickel markets with price controls, which caused markets to crash twice due to system errors.
It was later restored to full trading levels in March earlier this year.
LME Clear has been ordered by the Bank of England to bolster its governance and risk management, following a review, with the FCA still investigating the wider LME.
LME and its clearing house remain under review by both the FCA and BoE.