Goldman, Sachs & Co.
NYMEX RULE VIOLATIONS: 526. Block Trades (in part)
F. Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within five minutes of the time of execution in the following futures products: Brent Crude Financial, Brent Crude Oil Last Day Financial, Light Sweet Crude Oil, Gulf Coast Sour Crude Oil, NY Harbor ULSD, Henry Hub Natural Gas, RBOB Gasoline, Cocoa, Coffee, Cotton, No. 11 Sugar, Gold, Silver and Copper. In all other block-eligible products, the seller must ensure that each block trade is reported to the Exchange within fifteen minutes of the time of execution. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
Market Regulation Advisory Notice RA1208-4 Block Trades
6. Block Trade Price Reporting Requirements
b) Reporting Obligation (in part)
The failure to submit timely, accurate and complete block trade reports may subject the party responsible for the reporting obligation to disciplinary action.
Pursuant to an offer of settlement in which Goldman, Sachs & Co. (“Goldman”) neither admitted nor denied the rule violations upon which the penalty is based, on October 28, 2014 a panel of the New York Mercantile Exchange (“NYMEX”) Business Conduct Committee found that it has jurisdiction over Goldman because it is a NYMEX member and on January 18, 2013, and January 23, 2013, Goldman, through its employees, executed block trades in Henry Hub Natural Gas futures contracts and RBOB Gasoline futures contracts that were not reported to the Exchange within the applicable time limit following execution. Further, the Panel found that Goldman reported inaccurate execution times of these block trades. Additionally, the Panel found that the above trades were executed as spread transactions but misreported as outright transactions. In so doing the Panel concluded that Goldman violated NYMEX Rule 526.F.
In accordance with the settlement offer, the Panel ordered Goldman to pay a $40,000 fine.
October 30, 2014
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