CME Group has reached a settlement with Nymex member David Kotz over alleged position limits violations from September 2011 in Henry Hub natural gas futures contracts. Under the settlement Kotz neither admitted nor denied fault. A panel of the Nymex business conduct committee found that on Sept. 27, 2011, Kotz maintained an intraday open futures equivalent position of 1,081 short October 2011 Henry Hub natural gas futures contracts, consisting of both short outright positions and short trading at settlement (TAS) positions, which was 81 contracts (8.1%) over the standard expiration month limit of 1,000 contracts in effect for trade dates Sept. 26, 27 and 28, 2011. The panel also found that the transaction that put Kotz over the position limit was a 300-lot TAS spread trade and that Kotz liquidated this overage, resulting in profits of $11,860.00. Later that day, the panel said Kotz executed a short TAS transaction for 100 October 2011 Henry Hub natural gas futures contracts, which resulted in an intraday short position of 1,096 contracts, 96 contracts (9.6%) over the applicable position limit and that he liquidated this overage resulting in profits of $13,190.00. Inline with the terms of the settlement offer, the panel ordered Kotz to pay a fine of $15,000 to the exchange and to disgorge profits of $25,050.
CME Grouphas reached a settlement with Nymex member QuantRes Asset Management Ltd. over an alleged position limits violation from April 2013 in Henry Hub natural gas futures contracts. As part of the settlement, QuantRes neither admitted nor denied the rule violation. A panel of the Nymex business conduct committee found that on April 24, 2013, QuantRes maintained an open futures equivalent position of 2,178 long May 2013 Henry Hub natural gas futures contracts, which was 1,178 contracts (117.80%) over the standard expiration month limit in effect for trade dates April 24, 25, and 26, 2013. The panel ordered QuantRes to pay a fine of $35,000 to the exchange.