The Chicago Mercantile Exchange (CME) Business Conduct Committee ("BCC") fined and barred two traders for disruptive trading and wash trade rule violations.
The BCC ordered trader Markus Groebner to pay $50,000 for disruptive actions under CBOT Rule 575, which caused fluctuations in the publicly displayed Indicative Opening Price in the Wheat futures market by executing non-bona fide transactions.
In a separate action, the BCC ordered trader Howard Norman Stark to pay $90,000 for numerous Exchange trading rule violations based on attempting to avoid: (i) taking a bona fide market position exposed to market risk and (ii) maintenance margin requirements. The BCC found that Mr. Stark:
- failed to submit trading cards for keypunching on the original trade date;
- prearranged and noncompetitively executed trades;
- increased the quantity of a trade without competitively executing the additional quantity in the market;
- reported an execution to his customer that did not occur as a result of open outcry; and
- permitted another to use his unique user ID to access the Globex electronic trading platform.
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