A recent disciplinary action has been taken by the international derivatives marketplace in response to regulatory violations involving a certain asset management firm. In this case, a settlement was offered, which did not require the firm to admit or deny any violations or factual findings linked to the penalties imposed.
On two occasions in 2024, the firm held positions that exceeded the allowable limits set by the marketplace. Specifically, on February 26, the firm reported an intraday high of 6,339 April 2024 Live Cattle futures contracts, exceeding the limit by 39 contracts, or 0.62 percent. Later, on August 30, the firm held an intraday high of 6,085 October 2024 Lean Hogs futures contracts, surpassing the limit by 85 contracts, or 1.4 percent. Additionally, it held 6,574 December 2024 Live Cattle futures contracts, which exceeded the limit by 274 contracts, or 4.3 percent.
Upon addressing these excess positions, the firm managed to reduce its overextension in the Live Cattle contracts and achieved a profit of $78,350. As a consequence of these actions, the Business Conduct Committee concluded that the firm had violated a specific rule regarding position limits.
To resolve the matter, the firm was ordered to pay a fine of $20,000, alongside the requirement to disgorge the previously gained profit of $78,350.