International derivatives market CME Group has published a notice of disciplinary action against Eagle Seven LLC.
According to a settlement offer in which Eagle Seven LLC neither admitted nor denied any rule violations or factual allegations, a panel of the NYMEX Business Conduct Commission found that on the trade date of February 18, 2022, Eagle Seven executed a long intraday March 2022 Light Sweet Position in crude oil futures was 2,138 contracts, or 42.76%, above the limit for the month.
The committee also found that Eagle Seven liquidated its position during the settlement period on February 18, 2022 and accounted for more than 55% of the trading volume during the settlement period. The liquidation of Eagle Seven’s position during the settlement period was done with a reckless disregard for the adverse effect on the orderly conduct of trading or the fair execution of trades in the MAR22 crude oil futures contract. Eagle Seven’s liquidation of her position resulted in a profit of $470,360.
The panel further found that Eagle Seven failed to diligently supervise its employee who engaged in the activity in question, by failing to provide adequate compliance training and/or educational materials regarding NYMEX rules, and by failing to diligently supervise his trades to ensure compliance with NYMEX rules regarding position limits and disruptive trading practices;
The BCC found that, as a result, Eagle Seven violated NYMEX Rules 432.W., 562 and 575.D.
Under the settlement offer, the BCC ordered Eagle Seven to pay a fine of $115,000 and forfeit $470,360 in profits.