A Chinese billionaire recklessly tried to corner the market in nickel while investors like Elliott Management bet on an increase in the price of the metal. The LME had to step in to ensure the stability of the market and the survival of some key players and producers. That's what a market maker does.
The LME reversed trades to benefit its insider cronies at the expense of the investors who provide liquidity to the global metals market. Better capitalization and less concentration are needed - both of which are served by protecting investors instead of market manipulators.
The real villain in this story - as in most stories of financial disaster - is derivatives. The LME was blind to the real threat facing the nickel market because the bulk of trading is done in derivatives, not in actual commodities, and those positions lack transparency for market makers like the LME.