• #
      • CME-16-0563-BC
      • Effective Date
      • 14 December 2017
    • FILE NO.:



      Phillip L. Martin


      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.


      Pursuant to an offer of settlement in which Phillip L. Martin neither admitted nor denied the rule violations upon which the penalty is based, on December 12, 2017, a Panel of the CME Business Conduct Committee (“Panel”) found that on multiple dates between February 1, 2016, and October 12, 2016, Martin executed numerous wash trades involving Lumber futures contracts on Globex. Martin placed the opposing buy and sell orders with the knowledge and intent that the orders would match opposite one another. The purpose of these transactions was to move positions within or between his accounts. The Panel concluded that this activity violated CME Rule 534.


      In accordance with the settlement offer, the Panel fined Martin $20,000 and suspended his direct or indirect access to any trading floor and any electronic trading or clearing platform owned or operated by CME Group, including Globex, for 15 business days, beginning on the effective date below and continuing through and including January 5, 2018.


      December 14, 2017