Best Eagle Trading Ltd.
CBOT RULE VIOLATIONS:
Rule 432 (“General Offenses”)(in part)
It shall be an offense:
W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange;
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 Best Eagle Trading Ltd. (“Best Eagle”) neither admitted nor denied the rule violations up which the penalty is based, on August 12, 2015, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that it had jurisdiction over Best Eagle pursuant to Rules 402 and 418, and on numerous occasions between July 23, 2012, and September 27, 2012, a trader employed by Best Eagle executed wash trades on Globex in Soybean futures contracts. The matching buy and sell orders were entered with the knowledge and intent that the orders would match opposite one another. The purpose of these transactions was to move positions between two Best Eagle accounts. The Panel found that Best Eagle failed to diligently supervise its trader in a manner sufficient to ensure that his conduct was consistent with Exchange Rules.
The Panel concluded that Best Eagle thereby violated CBOT Rules 432.W. and 534.
In accordance with the settlement offer, the Panel ordered Best Eagle to pay a fine of $60,000.
August 14, 2015
CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.