NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Minsu Kim

COMEX RULES:

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.

Rule 432. General Offenses (in part)

It shall be an offense:

L.1. To fail to appear before the Board, Exchange staff or any investigation or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

FINDINGS:

On August 2, 2022, the Chief Regulatory Officer issued charges against Minsu Kim for violating COMEX Rules 534 and 432.L.1. based on allegations that between March 2, 2020, and May 14, 2021, Kim operated an automated trading system (“ATS”) that entered orders in COMEX Gold and Silver futures and traded opposite resting orders the ATS previously entered. The Business Conduct Committee (“BCC”) found that Kim knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk. In addition, the BCC found that Kim failed to appear before Exchange staff for a scheduled interview.

On March 15, 2023, a Hearing Panel Chair of the COMEX BCC found that Kim failed to submit a written answer to the charges issued against him and that Kim was deemed to have admitted the charges. Kim therefore waived his right to a hearing on the merits of the charges.

Pursuant to COMEX Rule 408.F., a BCC Panel found Kim guilty of committing the admitted charges and held a penalty hearing thereafter.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Kim to pay a fine in the amount of $80,000 in connection with this case and companion case CME 21-1459-BC ($15,000 of which is allocated to COMEX), and serve a five-year suspension from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group. The suspension shall begin on April 5, 2023 and continue for five years from the date that payment of the fine is paid in full.