• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME 16-0364-BC-2
      • Effective Date
      • 16 March 2018
    • MEMBER:

      BELVEDERE TRADING LLC

      EXCHANGE RULES: 432.W. GENERAL OFFENSES (in part)

      (W) It shall be an offense for any party to fail to diligently supervise its
      employees and agents in the conduct of their business relating to the Exchange.

      FINDINGS:

      Pursuant to an offer of settlement that Belvedere Trading LLC (“Belvedere”) presented at a hearing on March 14, 2018, in which Belvedere neither admitted nor denied the factual allegations or rule violations upon which the penalty is based, a Panel of the CME Business Conduct Committee (“BCC Panel”) found that, between October 1, 2015 and November 18, 2015, a trader then employed by Belvedere (the “trader”) and using Tag 50 user IDs registered to other employees of Belvedere, entered orders in the E-mini S&P 500 contract market without the intent to trade, but rather, to encourage market participants to trade opposite the smaller orders entered by the trader that were resting on the opposite side of the order book. After receiving a fill on the smaller order, the large orders were cancelled by the trader. The BCC Panel also found that, during this time period, Belvedere failed to adequately supervise (1) trading by its employees for potential spoofing despite prior notice from the Exchange regarding unrelated, but potentially similar, activity and (2) the use of Tag 50s by its employees to ensure that its employees used a unique user ID to access Globex.

      The BCC Panel concluded that Belvedere violated Exchange Rule 432.W.

      PENALTY:

      In accordance with the settlement offer, the BCC Panel fined Belvedere $100,000.