Summerhaven Investment Management, Llc

Allegations: ON JUNE 2, 2014, SUMMERHAVEN INVESTMENT MANAGEMENT, LLC ("SUMMERHAVEN") ENTERED INTO AN EXCHANGE FOR RELATED POSITIONS TRANSACTION. THE MARKET REGULATION DEPARTMENT OF CME GROUP INC. ALLEGED THAT SUMMERHAVEN DID NOT PROPERLY MAINTAIN DOCUMENTATION OF THE CORRESPONDING, SIMULTANEOUS SWAP TRANSACTION, AND THEREFORE VIOLATED NYMEX RULE 538.H. Status: Final Sanction Detail: ON MARCH 24, 2015, SUMMERHAVEN INVESTMENT MANAGEMENT, LLC ("SUMMERHAVEN") SUBMITTED AN OFFER OF SETTLEMENT TO THE NEW YORK MERCANTILE EXCHANGE BUSINESS CONDUCT COMMITTEE (THE "BCC") IN WHICH SUMMERHAVEN NEITHER ADMITTED NOR DENIED THE ALLEGED VIOLATION OF NYMEX RULE 538.H. ON APRIL 15, 2015, SUMMERHAVEN PRESENTED THE OFFER OF SETTLEMENT TO A PANEL OF THE BCC, WHICH WAS SUPPORTED BY THE MARKET REGULATION DEPARTMENT. IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE BCC ORDERED SUMMERHAVEN TO PAY A FINE OF $7,500 TO THE NEW YORK MERCANTILE EXCHANGE. SUMMERHAVEN PAID THE FINE ON APRIL 17, 2015 AND THE MATTER IS NOW CLOSED. Summary: ON MARCH 24, 2015, SUMMERHAVEN INVESTMENT MANAGEMENT, LLC ("SUMMERHAVEN") SUBMITTED AN OFFER OF SETTLEMENT TO THE NEW YORK MERCANTILE EXCHANGE BUSINESS CONDUCT COMMITTEE (THE "BCC") IN WHICH SUMMERHAVEN NEITHER ADMITTED NOR DENIED THE ALLEGED VIOLATION OF NYMEX RULE 538.H. ON APRIL 15, 2015, SUMMERHAVEN PRESENTED THE OFFER OF SETTLEMENT TO A PANEL OF THE BCC, WHICH WAS SUPPORTED BY THE MARKET REGULATION DEPARTMENT. IN ACCORDANCE WITH THE SETTLEMENT OFFER, THE BCC ORDERED SUMMERHAVEN TO PAY A FINE OF $7,500 TO THE NEW YORK MERCANTILE EXCHANGE. SUMMERHAVEN PAID THE FINE ON APRIL 17, 2015 AND THE MATTER IS NOW CLOSED.

Allegations: THE CFTC ISSUED AN ORDER (THE "ORDER") FINDING THAT FROM ON OR ABOUT JUNE 2018 TO ON OR ABOUT JULY 2018, SUMMERHAVEN (A) ENTERED BIDS AND OFFERS FOR THE SAME QUANTITIES OF THE SAME FUTURES CONTRACTS FOR TRADING ACCOUNTS THAT HAD THE SAME BENEFICIAL OWNER AND WHICH WERE INTENDED TO AND DID IN FACT OFFSET EACH OTHER UPON EXECUTION (I.E., "WASH SALES") IN VIOLATION OF SECTION 4C(A)(L) AND (2)(A) OF THE COMMODITY EXCHANGE ACT (THE "ACT") AND CFTC REGULATION 1.38(A) AND (B) IN CONNECTION WITH THE ALLEGED WASH SALES, FAILED TO SUPERVISE ITS ACTIVITIES IN VIOLATION OF CFTC REGULATION 166.3. Status: Final Sanction Detail: SEE DESCRIPTION IN ITEM 13 BELOW. Summary: SUMMERHAVEN SUBMITTED, AND THE CFTC ACCEPTED, AN OFFER OF SETTLEMENT IN WHICH IT, WITHOUT ADMITTING OR DENYING ANY OF THE CFTC'S FINDINGS. AGREED (A) TO CEASE AND DESIST FROM VIOLATING SECTION 4C(A)(L) AND (2)(A) OF THE ACT AND CFTC REGULATIONS 1.38(A) AND 166.3 AND (B) TO PAY A SUMMERHAVEN SHALL PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) ("CMP OBLIGATION"), PLUS ANY POST-JUDGMENT INTEREST. SUMMERHAVEN SHALL SATISFY THE CMP OBLIGATION BY MAKING PAYMENTS AS FOLLOWS: - $100,000 TO BE PAID WITHIN 10 DAYS OF ENTRY OF THE ORDER; - $200,000 TO BE PAID WITHIN 12 MONTHS OF THE DATE OF ENTRY OF THE ORDER; AND - $200,000 TO BE PAID WITHIN 24 MONTHS OF THE DATE OF ENTRY OF THE ORDER. POST-JUDGMENT INTEREST SHALL ACCRUE ON THE CMP OBLIGATION BEGINNING ON THE DATE OF ENTRY OF THE ORDER AND SHALL BE DETERMINED BY USING THE TREASURY BILL RATE PREVAILING ON THE DATE OF ENTRY. THE FORMER MANAGING PARTNER/HEAD OF TRADING AND THE FORMER PARTNER/CHIEF COMPLIANCE OFFICER IDENTIFIED IN THE ORDER IN CONNECTION WITH THE EXECUTION, SUPERVISION AND APPROVAL OF THE ALLEGED WASH TRADES ARE NO LONGER EMPLOYED AT SUMMERHAVEN AS OF DECEMBER 2019.