The Business Conduct Committees of the Commodity Exchange and the New York Mercantile Exchange (respectively, the "COMEX BCC Panel" and the "NYMEX BCC Panel") sanctioned several firms and a trader for block trade violations and general offense misconduct.
- $150,000 for block trade practice misconduct after (i) failing to report the execution of block trades in a timely manner and (ii) trading block trades opposite of customers at a price advantageous to a firm's controlled account; the trader was also ordered to disgorge profits of $74,365;
- $60,000 for block trade misconduct and general offenses after failing to (i) submit multiple block trades with accurate execution times, (ii) report block trades in a timely manner and (iii) provide employees with proper training to ensure compliance with NYMEX rules; and
- $35,000 for general offenses that involved (i) entering price modifications in several Energy Options contracts with increasingly widening spreads between the bid and offer prices and (ii) failing to adequately address the problem upon becoming aware of the price widening.
- a firm $650,000 for multiple COMEX violations after (i) allowing a client to provide inaccurate and untimely position data to the COMEX, (ii) providing NYMEX with inaccurate information upon NYMEX opening an investigation into the firm and (iii) failing to take remedial measures to correct the firm's identified errors; and
- a trader $25,000 for general offense misconduct after (i) causing multiple market orders to be entered on one side of the Copper futures market contract and (ii) failing to identify and fix the cause of the malfunction.
Additionally, NYMEX and COMEX issued a joint fine of $70,000 against a firm. According to the disciplinary actions (see here and here), the firm was fined for (i) entering inaccurate execution times in multiple aluminum futures contracts and coal futures and options contracts, (ii) failing to report the trades in a timely manner and (iii) inadequately training staff on the relevant Exchange rules. NYMEX also found that the firm disclosed counterparty information - while executing the block trades - without the consent of the counterparties.
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