NEW YORK (Reuters) - The London Metal Exchange has offered the job of chief executive to Martin Pratt, two sources familiar with the matter said on Tuesday, picking a veteran broker to lead the bourse through the most tumultuous period in its 136-year history.
The 42-year-old Pratt, now chief operating office at Triland Metals Ltd, a non-ferrous metals futures broker owned by Japan’s Mitsubishi Corp (8058.T), was chosen over the exchange’s own chief operating officer, Diarmuid O’Hegarty, and Garry Jones, a former CEO of NYSE Liffe, the sources said.
In Pratt, the LME is tapping an experienced metals trader who has both the knowledge of its complex trading structure and sufficient distance from the crisis over warehousing that has engulfed the exchange. He would replace outgoing chief Martin Abbott, who announced plans to leave in June.
The LME declined to comment.
Picking a market insider over an exchange industry executive may reflect the unique challenges ahead for the new CEO, arguably the most important job in global metals trading.
Pratt has spent his career trading commodities and working for LME ring dealers, firms that can trade in the exchange’s open-outcry trading floor known as the ring. Before stepping into the COO job at Triland in January 2007 he worked for well-known brokers Natixis and Sucden.
While Triland is one of the LME’s 11 ring-dealing members, it doesn’t own any of the warehouses at the center of a controversy over the rules governing metal storage going back to 2009.
The exchange has been damaged by prolonged and scathing criticism over its handling of its warehousing policy, which some consumers say has contributed to record high physical price premiums for aluminum and long wait times to take delivery.
Alongside Goldman Sachs (GS.N) and other banks and traders that now own many of the world’s biggest warehousing companies, the LME is facing several class action lawsuits alleging “anticompetitive behavior” in aluminum warehousing.
The exchange’s new owner, Hong Kong Exchanges and Clearing Ltd (HKEx) (0388.HK), has said the suits are without merit and the LME will contest it vigorously.
It was not clear if Pratt will accept the job.
“Nothing’s been confirmed,” one of the sources said.
Editing by Phil Berlowitz