CME Group, a leading international derivatives marketplace, has levied a fine of $130,000 on Citigroup Global Markets, Inc. for breaching COMEX rules related to trade record maintenance and reporting inaccuracies.
The penalty follows an investigation where Citigroup Global Markets, Inc. did not admit or deny the allegations, per a settlement offer. According to the COMEX Business Conduct Committee, Citigroup’s back-office accounting platform failed to maintain proper records of cleared trades when its settlement platform encountered capacity constraints due to exceptionally high trading volumes on March 13, 2023.
From March 13 to April 27, 2023, Citigroup was found to have submitted inaccurate large trader position reports, failed to promptly correct large trader data, and delayed submission of position change data to the Clearing House. These discrepancies impacted various contract months of Gold futures, options on futures, and Copper options.
The Committee concluded that Citigroup violated COMEX Rules 561 and 811 due to these operational lapses. Additionally, on April 5, 2023, Citigroup made an open interest adjustment in 2023 Gold futures that exceeded two percent of the open interest, violating COMEX Rule 854.B. Further violations under Rule 854.C occurred when Citigroup re-opened positions in Gold and Aluminum futures from March 14 to March 31, 2023.
In response to these findings, the Panel ordered Citigroup to pay a fine of $130,000. The disciplinary action, effective as of July 18, 2024, underscores CME Group’s commitment to maintaining integrity and adherence to market regulations.
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