• NOTICE OF DISCIPLINARY ACTION

      • #
      • NYMEX 18-1005-BC
      • Effective Date
      • 30 August 2019
    • NON-MEMBER:

      CORNERSTONE GLOBAL COMMODITIES LLC

      NYMEX RULES: RULE 432. GENERAL OFFENSES (IN PART)

      It shall be an offense:

      W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

      RULE 526. BLOCK TRADES

      The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:

      F. The seller must ensure that each block trade is reported to the Exchange within five 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.

      FINDINGS:

      Pursuant to an offer of settlement that Cornerstone Global Commodities (“Cornerstone Global”) presented at a hearing on August 28, 2019, in which Cornerstone Global neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC Panel”) found that between December 2017 and June 2018, Cornerstone Global executed numerous block trades for customers in various NYMEX Energy contracts, including Henry Hub Natural Gas and Crude Oil Futures contracts, that Cornerstone failed to report to the Exchange within the required time period following execution, as well as failed to report accurate trade details for these block trades to the Exchange. The BCC Panel also found that, during these time frames, Cornerstone Global failed to properly advise its employees as to relevant NYMEX rules and Market Regulatory Advisory Notices (“MRANs”), as well as failed to supervise the execution of block trades by its employees to make certain that brokers complied with NYMEX block trade reporting requirements.

      The BCC Panel found that, as a result, Cornerstone Global violated NYMEX Rules 432.W. (General Offenses – Failure to Supervise) and 526.F. (“Block Trades”).

      PENALTY:

      In accordance with the settlement offer, the BCC Panel ordered Cornerstone Global to pay a fine to the Exchange in the amount of $60,000.