LME fines Sucden over May nickel market rule breaches

The London Metal Exchange said it has fined Sucden UK, one of its ring-dealing members, £80,000 (US$162,000) for breaching disclosure and lending rules in the nickel market on May 17 and May 18 of this year. The fine was reduced from £100,000 because Sucden fully cooperated with the proceedings initiated by the exchange and didn't contest the charges. In addition, the LME noted that it accepted that the breach of rules was "not deliberate" and that the company has put in place procedures to ensure it doesn't happen again. The two specific charges against Sucden were that on those two days it failed to notify the exchange that it had "effective control" over LME nickel warrants and that it didn't comply with the dominant position lending guidance stipulated under such circumstances. May marked the cycle peak in LME nickel prices and although May 17-May 18 weren't quite the very top of the market, they were characterised by super-high prices and vicious backwardation--$3,290 for cash-3s metal on May 17 itself.