• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT 14-9846-BC-1
      • Effective Date
      • 24 July 2017
    • FILE NO.:

      CBOT‐14‐9846‐BC


      NON‐MEMBER:

      Chengbin Chen


      CBOT RULE VIOLATION:

      Rule 432. General Offenses


      It shall be an offense:


      ***


      G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.


      ***


      L.1. to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.


      Rule 576 Identification of Globex Terminal Operators


      Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.


      FINDINGS:

      On June 9, 2017, in accordance with Chicago Board of Trade (“CBOT”) Rule 407.C, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) found that Chengbin Chen failed to answer charges issued against him by the CBOT Probable Cause Committee. The Hearing Panel Chair accordingly ruled that the charges issued were deemed admitted, and through this admission, Cheng had forfeited his right to a hearing on the merits of the charges.


      On June 20, 2017, a penalty hearing was held before a Panel of the CBOT BCC related to these admitted charges. The Panel found Chen guilty of prearranging the execution of Soybean futures trades on one or more occasions between March 20, 2014, and May 22, 2014, for the purpose of transferring equity between the accounts of two market participants. Additionally, the Panel found that Chen traded for one of the accounts involved by using a Tag 50 user ID other than his own. Finally, the Panel found that Chen failed to appear before Exchange staff at a scheduled staff interview. Accordingly, the Panel determined that Chen violated CBOT Rules 432.G, 432.L.1 and 576.


      PENALTY:

      Based on the record and the Panel’s findings and conclusions, the Panel ordered Chen to pay a fine in the amount of $85,000, and to be permanently barred from (1) membership and privileges at any CME Group exchange; (2) direct or indirect access and use of any CME Group trading floor, electronic trading or clearing platform owned or operated by any CME Group exchange; and (3) affiliation with, employment by, or association with a broker association, guaranteed introducing broker, Member or affiliate of a Member registered with any CME Group exchange, trading platform or clearing platform.


      EFFECTIVE DATE:

      July 24, 2017