Ho Ming Yu
CBOT RULE VIOLATIONS:
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 Ho Ming Yu (“Ho”) neither admitted nor denied the rule violations upon which the penalty is based, on July 23, 2015, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that Ho was subject to the jurisdiction of the BCC under Rules 402 and 418, and that in November and December 2012, Ho executed numerous trades totaling 772 contracts in Corn Futures, Soybean Futures, and Wheat Futures in which Ho maintained ownership of the accounts on both sides of the transactions. The trades were executed for the purpose of realizing losses in one trading account owned by Ho in order to manage tax obligations, and the strategy was implemented by entering opposing buy and sell orders between the bid-ask spread in the relevant contracts. Ho reasonably should have known that the trades would achieve a wash result – i.e., the purchase and sale of the same instrument at the same price for accounts with the same beneficial ownership.
The Panel concluded that Ho thereby violated CBOT Rule 534.
In accordance with the settlement offer, the Panel ordered Ho to pay a fine of $10,000. The Panel also suspended Ho from all direct access to any trading floor or electronic trading or clearing platform owned or operated by CME Group Inc. for a period of 25 business days. The suspension will run from July 27, 2015, to August 28, 2015.
July 27, 2015
Please see the related disciplinary release in companion case NYMEX 13-3959-BC.
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