• NOTICE OF DISCIPLINARY ACTION

      • #
      • COMEX 15-0320-BC-1
      • Effective Date
      • 03 November 2017
    • MEMBER:

      Citigroup Global Markets, Inc

      EXCHANGE RULES:

      Rule 432. GENERAL OFFENSES

      W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

      Rule 534. – Wash Trades Prohibited

      No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition of wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

      FINDINGS:

      Pursuant to an offer of settlement that Citigroup Global Markets, Inc. (“Citigroup”) presented at a hearing on November 1, 2017, in which Citigroup neither admitted nor denied the findings or rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“Panel”) found that between November 26, 2014 and September 29, 2015, a Citigroup trader entered orders in various COMEX futures products for different accounts wholly owned and controlled by Citigroup which he knew or should have known would match with each other. The Panel further found that Citigroup failed to diligently supervise its trader in a manner sufficient to ensure that the trader executed the trades in compliance with Exchange rules.

      The Panel found that as a result of the foregoing, Citigroup violated Exchange Rules 432.W and 534.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Citigroup to pay a fine to the Exchange in the amount of $20,000.