D. E. SHAW & CO., L.P.
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 D. E. Shaw & Co., L.P. (“D. E. Shaw & Co.”) presented at a hearing on April 29, 2014, in which D. E. Shaw & Co. neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that it had jurisdiction over D. E. Shaw & Co. pursuant to Exchange Rules 400 and 402, as D. E. Shaw & Co. is an affiliate of NYMEX members D. E. Shaw Kalon Portfolios, L.L.C. and D. E. Shaw Plasma Portfolios, L.L.C., and that on November 27, 2012, certain funds to which D. E. Shaw & Co. and certain affiliates provided investment management services, held an open position of 1,467.75 December 2012 Henry Hub Natural Gas Look-Alike Last Day Financial Futures (“DEC12 Financial”) future equivalent contracts, while also holding 750 long contracts of December 2012 Henry Hub Natural Gas Futures (“DEC12 Physical”).
The Panel found that D. E. Shaw & Co. violated NYMEX Rule 562 (Position Limit Violations), which allowed D. E. Shaw & Co. to hold up to 5,000 DEC12 Financial contracts, provided the firm did not hold any DEC12 Physical contracts during the last three trading dates, e.g., November 26, 27, and 28, 2012.
In accordance with the settlement offer, the Panel ordered D. E. Shaw & Co. to pay a fine to the Exchange in the amount of $25,000.
May 1, 2014
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