NOTICE OF DISCIPLINARY ACTION

MEMBER:

VIRTU FINANCIAL GLOBAL MARKETS LLC

COMEX RULES:

Rule 432. General Offenses (in part)

It shall be an offense:

L. 3. 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.

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

Rule 534. Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

FINDINGS:

Pursuant to an offer of settlement in which Virtu Financial Global Markets LLC (“VFGM”) neither admitted nor denied the rule violations upon which the penalty is based, on July 6, 2022, a Panel of the COMEX Business Conduct Committee (“Panel”) found that on April 16, 2020, a VFGM trader executed a Gold futures block trade on behalf of a VFGM account opposite another account with common beneficial ownership. The Panel found that each party’s decision to enter into the block trade was not made by an independent decision maker. The Panel found that as a result of the foregoing, VFGM violated COMEX Rule 534.

Moreover, the Panel found that between November 2019, and April 2020, VFGM failed to make a complete production of responsive records in a timely manner to several requests by duly authorized Exchange staff to produce records, including trade-related electronic chat communications. The Panel also found that VFGM failed to diligently supervise its employees by not properly advising and training its traders as to relevant Exchange rules and MRANs, and by failing to ensure that its compliance personnel provided clear and accurate guidance to the traders regarding the execution of block trades and wash transactions. The Panel found that as a result of the foregoing, VFGM violated COMEX Rules 432.L.3. and 432.W.

PENALTY:

In accordance with the settlement offer, the BCC Panel ordered VFGM to pay a $60,000 fine in connection with this case and companion case NYMEX 20-1273-BC, $30,000 of which is to be paid to COMEX.