• NOTICE OF DISCIPLINARY ACTION

      • #
      • COMEX 14-9777-BC
      • Effective Date
      • 20 July 2015
    • MEMBER:

      GOLDMAN SACHS EXECUTION & CLEARING, L.P.

      LEGACY EXCHANGE RULE:

      Rule 853. TRANSFERS OF TRADES AND CUSTOMER ACCOUNTS

      853.A. Transfers of Trades

      1. Subject to the limitations of Rule 854, existing trades may be transferred either on the books of a clearing member or from one clearing member to another clearing member provided:

      i. The transfer merely constitutes a change from one account to another account provided the underlying beneficial ownership in said accounts remains the same; or

      ii. An error has been made in the clearing of a trade and the error is discovered and the transfer is completed within three Business Days after the trade date.

      2. Subject to the limitations of Rule 854, Exchange staff may, upon request by the clearing member(s), approve a transfer of existing trades either on the books of the same clearing member, or from the books of one clearing member to the books of another clearing member if the transfer is in connection with, or as a result of, a merger, asset purchase, consolidation or similar nonrecurring transaction between two or more entities where one or more entities become the successor in interest to one or more other entities.

      FINDINGS:

      Pursuant to an offer of settlement Goldman Sachs Execution & Clearing, L.P. (“GSEC”) presented at a hearing on July 16 2015, in which GSEC neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“BCC”) found that it had jurisdiction over GSEC as a COMEX member pursuant to Rules 400 and 402. The Panel also found that two GSEC customers with different beneficial ownership requested that GSEC process the purchase and sale of their gold futures and options book. On February 27, 2013, GSEC processed their transaction as a transfer of the relevant futures and options contracts between their accounts at GSEC without obtaining the approval of the Exchange.

      The Panel found that as a result, GSEC violated Legacy Exchange Rule 853.A.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered GSEC to pay a fine to the Exchange in the amount of $110,000.