Apologetic dealer pays 100,000 pounds to LME

CREDIT Lyonnais Rouse, a ring dealing member of the London Metal Exchange, has apologised to the LME for its recent involvement in the copper market and paid pounds 100,000 towards the exchange's costs, according to the LME, reports Reuter.

Credit Lyonnais Rouse said it apologised for its involvement in the development of the situation in the copper market referred to in LME board notices.

'CLR accepts that that situation could have been interpreted as involving an undue influence over the market, but CLR took no action because it was satisfied no such undue influence was or would be exercised,' it said.

Throughout June, July and August a backwardation or cash premium built up in the copper market.

Analysts said this was unusual as the market was in surplus and normally the cash price would be at a discount to the forward price. The LME twice warned the market it was ready to act to keep the market orderly and prevent what it described as the development of an undesirable situation.

On 8 September it imposed a dollars 5- a-day limit on the backwardation and in the following three weeks the copper price fell sharply.

CLR said it recognised it had a duty as an LME member to be particularly vigilant and to observe high standards of market conduct.

The LME has decided to take no further action. Credit Lyonnais Rouse is part of Credit Lyonnais, the French banking group.