VERMILLION ASSET MANAGEMENT, LLC
NYMEX RULE VIOLATION:
562. POSITION LIMIT VIOLATIONS
Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.
Pursuant to an offer of settlement Vermillion Asset Management, LLC (“Vermillion”) presented at a hearing on February 5, 2014, in which Vermillion neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that Vermillion was subject to Exchange jurisdiction pursuant to NYMEX Rule 418 and that on November 26, 2012, Vermillion held a December 2012 Henry Hub Natural Gas Futures (“DEC12 Physical”) intraday position that violated the Conditional Limit in December 2012 Henry Hub Natural Gas Look-Alike Last Day Financial Futures (“DEC12 Financial”). The 1,000 lot standard limit for DEC12 Financial was in effect on trade dates November 26, 2012, November 27, 2012 and November 28, 2012. After qualifying for the Conditional Limit that allowed it to hold up to 5,000 DEC12 Financial contracts during the last three days of the contract’s trading provided that the firm did not hold any DEC12 Physical contracts during the last three trading days, Vermillion held a position of 2,107.500 long DEC12 Financial contracts and shortly thereafter, bought 21 contracts of DEC12 Physical, thereby violating the Conditional Limit.
The Panel found that as a result, Vermillion violated Rule 562.
In accordance with the settlement offer, the Panel ordered Vermillion to pay a fine to the Exchange in the amount of $35,000.
February 7, 2014
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