The business conduct committees of the New York Mercantile Exchange, the Chicago Board of Trade, and the Chicago Mercantile Exchange (respectively, the "NYMEX BCC Panel," "CBOT BCC Panel," and "CME BCC Panel") fined and suspended multiple firms and individual traders for various trade practice violations.
The NYMEX BCC Panel imposed a $135,000 penalty on a firm for failing to report the correct execution times of the customers' block trades in various NYMEX Energy futures contracts. Additionally, several brokers employed by the firm revealed the counterparties' identities without previously receiving permission from the customer.
The CBOT BCC Panel penalized:
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a firm $100,000 for (i) sending several "bursts" of messages to the Chicago Board of Trade due to a malfunction in the firm's automated trading system ("ATS"), resulting in a saturation of the Exchange's Market Segment Gateway, and (ii) failing to examine the ATS's malfunction;
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a trader $20,000 and a suspension for conducting a hedge transaction and establishing its price without executing a customer's block trade first, thereby allowing the trader to guarantee his employer a profit from the execution opposite the customer;
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a trader $25,000 and a suspension for entering and canceling layered orders in the Soft Red Wheat futures market without intending to trade; and
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a trader $40,000 and a suspension for executing trades in various Treasury Note Options markets using his personal trading account to trade against his customer's orders.
Separately, the CME BCC Panel imposed a $15,000 penalty and suspension on a trader for, while acting as a local in the Standard and Poor's 500 Stock Price Index futures pit, prearranging and noncompetitively executing trades opposite a local. The trader carried out trades opposite the local, but failed to openly bid or offer the orders.
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