COMEX and NYMEX Issue Disciplinary Actions against Firm Regarding General Offenses and Wash Trades

The Commodity Exchange ("COMEX") and the New York Mercantile Exchange ("NYMEX") announced disciplinary actions against Jaypee International Inc. ("Jaypee") for violations of Exchange Rules 432 ("General Offenses") and 534 ("Wash Trades Prohibited").

COMEX and NYMEX (the "Exchanges") found that an employee of Jaypee executed a series of wash trades between Jaypee accounts in order to liquidate concurrent long and short positions and thereby avoid delivery, and to transfer positions between accounts to avoid posting margin. The Exchanges also found that Jaypee failed to supervise its traders diligently and in a manner sufficient to ensure that they were familiar with Exchange rules.

The Exchanges also charged the individual who executed these washed trades with violations of Exchange Rule 534. The Exchanges found that the individual was the sole decision-maker for the buy and sell sides of these wash trades.

In accordance with the settlement offer, the Exchanges ordered Jaypee to pay a fine in the amount of $40,000. Additionally, the individual was ordered to pay a $5,000 fine.

See: COMEX Notice Regarding Jaypee; NYMEX Notice Regarding Jaypee; COMEX Notice Regarding Individual; NYMEX Notice Regarding Individual.