Trading Firm Settles CFTC Charges for Exceeding Position Limits
"Federal position limits provide an important prophylactic against manipulation ... Today's action shows the CFTC will use its ability to look at positions on and across exchanges to enforce compliance and protect the integrity of the futures markets."
Ian McGinley, CFTC Director of Enforcement
"Federal position limits provide an important prophylactic against manipulation ... Today's action shows the CFTC will use its ability to look at positions on and across exchanges to enforce compliance and protect the integrity of the futures markets."
Ian McGinley, CFTC Director of Enforcement
A trading firm settled CFTC charges for exceeding (i) position limits in crude oil futures traded on the NYMEX and (ii) position limits in live cattle futures traded on the CME.
The CFTC found that:
- the firm held positions in NYMEX Options and IFED Options equivalent to 7,484 CL contracts, 1484 contracts over the limit of 6,000.
- the firm held a position equivalent of 7,091 contracts, 2,091 contracts over that day's limit of 5,000.
- the firm held a position equivalent to 6,074 contracts, 74 contracts over the limit of 6,000.
- the firm held a position equivalent to 6,594, 1,594 contracts over that day's limit of 5,000.
The trading firm agreed (i) to cease and desist violating CEA Section 4a(b) ("Excessive Speculation") and CFTC Regulation 150.2 ("Federal speculative position limits"); and (ii) to pay a civil monetary penalty of $500,000.
According to the CFTC's press release, this marks the agency's "first use of its authority to enforce position limits on aggregate positions held on multiple exchanges."