International derivatives marketplace CME Group has fined Citigroup Global Markets, Inc for alleged violations of COMEX rules.

Pursuant to an offer of settlement, in which Citigroup Global Markets, Inc. neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, a Panel of the COMEX Business Conduct Committee found that on March 13, 2023, Citigroup’s back-office accounting platform failed to maintain records of cleared trades after its settlement platform reached an upper limit of traded contracts due to extremely high trading volume.

As a result, from that date through April 27, 2023, Citigroup: (1) submitted inaccurate large trader position reports to the Exchange; (2) failed to provide the Exchange with large trader corrections; and (3) failed to submit position change data to the Clearing House in a timely manner.

When Citigroup resolved the issue, it could not provide the Exchange with postdated corrections to those reports.

These inaccurate and untimely reports included positions in various contract months of Gold futures and options on futures, and Copper options.

The Panel found that as a result of the foregoing, Citigroup violated COMEX Rules 561 and 811.

Additionally, the Panel found that on April 5, 2023, Citigroup submitted an open interest adjustment in 2023 Gold futures representing a decrease greater than two percent of open interest. Therefore, the Panel found that Citigroup violated COMEX Rule 854.B.

Finally, the Panel found that on multiple trade dates from March 14, 2023, through March 31, 2023, Citigroup submitted adjustments to re-open positions in Gold and Aluminum futures. Therefore, the Panel found that Citigroup violated COMEX Rule 854.C.

Based on the record and the Panel’s findings and conclusions, the Panel ordered Citigroup to pay a fine in the amount of $130,000 in connection with this case and companion cases.

The effective date of the disciplinary action notice is July 18, 2024.