• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME 15-0134-BC-2
      • Effective Date
      • 27 October 2016
    • NON-MEMBER:

      Henry Van de Velde

      CME RULE VIOLATIONS:

      Rule 534. Wash Trades Prohibited

      No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

      FINDINGS:

      Pursuant to an offer of settlement in which Henry Van de Velde (“Van de Velde”) neither admitted nor denied the rule violation upon which the penalty is based, on October 25, 2016, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“BCC” or “Panel”) found that Van de Velde was subject to the BCC’s jurisdiction pursuant to Rules 402 and 418. The Panel further found that on May 12, 2014, Van de Velde, while working on behalf of a non-member entity and in conjunction with a broker, entered multiple matching buy and sell orders on the CME Globex trading platform in Lean Hogs futures contracts for accounts with common beneficial ownership on both sides of the market. The matching buy and sell orders were entered with the knowledge and intent that the orders would match opposite one another for the purpose of moving positions between accounts.

      The Panel concluded that Van de Velde thereby violated CME Rule 534.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Van de Velde to pay a fine of $10,000 and suspended his direct access to any trading floor or electronic trading or clearing platform owned or operated by CME Group, Including Globex, for five business days.

      EFFECTIVE DATE:

      October 27, 2016