CBOT RULE VIOLATIONS:
RULE 432 GENERAL OFFENSES (in part)
It shall be an offense:
G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts;
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.
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.
Pursuant to an offer of settlement in which Aleksey Vsemirnov (“Vsemirnov”) neither admitted nor denied the rule violations upon which the penalty is based, on June 3, 2015, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that Vsemirnov voluntarily submitted himself to the jurisdiction of the Exchange for purposes of settling this matter, and that from August 25, 2011, to August 20, 2012, Vsemirnov, while trading for the benefit of his personal account and the account of another non-member, executed numerous noncompetititve round-turn money pass transactions for his personal account opposite the non-member’s account in the Soybean Oil, Oats, Rough Rice and Wheat futures markets and the Soybean Oil options on futures market for the purpose of transferring funds to his personal account from the non-member’s account. In addition, the Panel found that during the same time period, Vsemirnov executed trades in the Oats and Rough Rice futures markets and the Soybean Oil options on futures market on Globex where the account over which he had control was on both sides of the transactions, resulting in no change in beneficial ownership. The purpose of these transactions was to move positions between accounts. Lastly, the Panel found that Vsemirnov allowed an employee to enter orders on Globex using his Tag 50 User ID.
The Panel concluded that Vsemirnov thereby violated Rules 432.G., 534 and 576.
In accordance with the settlement offer and after taking Vsemirnov’s financial condition into consideration when it levied the sanction, the Panel ordered Vsemirnov to pay $5,353.50 in restitution and barred Vsemirnov from accessing any CME Group Inc. trading floor, and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. beginning on the effective date below and continuing for three years from the date restitution is paid.
June 5, 2015
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