GOLD STREET TRADING LIMITED
RULE 526.F. BLOCK TRADES (in part)
[I]n the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include… the time of execution[.]
RULE 432.W. GENERAL OFFENSES
It shall be an offense for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
RULE 432.L.2. GENERAL OFFENSES
It shall be an offense to fail to fully answer all questions or produce all books and records at such hearing or in connection with any investigation, or to make false statements.
RULE 432.L.3. GENERAL OFFENSES
It shall be an offense to fail to produce any books or records requested by duly authorized Exchange staff, in the format and medium specified in the request, within 10 days after such request is made or such shorter period of time as determined by the Market Regulation Department in exigent circumstances.
Following an evidentiary hearing on the merits, commenced on May 12, 2021, a Panel of the COMEX Business Conduct Committee (“Panel”) found that, between May 2017 and February 2018, Gold Street Trading Limited failed to report block trades in COMEX Metal products, including Gold futures and options on futures, to the Exchange within the time period and in the manner specified by the Exchange. Specifically, Gold Street engaged in a continuous pattern of inaccurately reporting block trades and reporting block trades late to the Exchange. The Panel further found that the reasons provided by Gold Street to justify its late reporting did not rise to the level of being beyond Gold Street’s control.
The Panel also found that during this timeframe Gold Street personnel did not properly train or supervise its employee, did not have a sufficient understanding of Exchange Rules, and therefore was ill-equipped to provide the necessary training and supervision needed for its employee, including as it related to compliance with Rule 526.F. Finally, the Panel found that throughout the entire investigation, Gold Street provided incomplete records, communications unrelated to the trades at issue, and audio recording and chat transcripts that posed significant difficulties for Market Regulation Staff to review. In addition, for almost one year, Gold Street failed to comply with the due dates provided in Market Regulation’s written request for records and then failed to seek extensions of time after completely disregarding the deadline. This violative conduct significantly delayed Market Regulation’s Investigation.
Accordingly, the Panel found that Gold Street violated COMEX Rules 526.F., 432.W., 432.L.2, and 432.L.3.
Based upon the record and the Panel’s findings and conclusions, the Panel ordered Gold Street to pay a fine in the amount of $85,000.