Guardian International Gold Corp.
Parties to any EFRP transaction must maintain all documents relevant to the Exchange contract and the cash, OTC swap, OTC option, or other OTC derivatives, including all documents customarily generated in accordance with relevant market practices and any documents reflecting payment and transfer of title. Any such documents must be provided to the Exchange upon request, and it shall be the responsibility of the carrying clearing member firm to provide such requested documentation on a timely basis.
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 on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.
Pursuant to an offer of settlement that Guardian International Gold Corp. (“Guardian”) presented at a hearing on February 20, 2014 in which Guardian neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“Panel”) found that Guardian voluntarily consented to the jurisdiction of the Exchange and that on July 30, 2012, Guardian entered into two EFRP transactions through a broker which resulted in Guardian being on both sides of the transactions. In addition, the Panel found that the transactions did not contain documentation of the corresponding cash positions and, thus were not bona fide EFRP transactions.
The Panel found that as a result, Guardian violated Rules, 538.H. and 534.
In accordance with the settlement offer, the Panel ordered Guardian to pay a fine to the Exchange in the amount of $15,000.
February 24, 2014
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