VERMILLION ASSET MANAGEMENT, LLC
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.
Pursuant to an offer of settlement Vermillion Asset Management, LLC (“Vermillion”) presented at hearing on August 13, 2014, in which Vermilion neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“Panel”) found that it had jurisdiction over Vermillion pursuant to Rules 402 and 418 and that on trade date February 15, 2013, Vermillion entered into four EFRP transactions through a broker that was also the counterparty to the transactions. These transactions did not contain documentation of the related swap transaction, and therefore were not bona fide EFRP transactions.
The Panel found that as a result, Vermillion violated Rule 538.H.
In accordance with the settlement offer, the Panel ordered Vermillion to pay a fine to the Exchange in the amount of $20,000.
August 15, 2014
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