CME 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 Ashley Ball (“Ball”) neither admitted nor denied the rule violations upon which the penalty is based, on May 27, 2015, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that Ball voluntarily submitted himself to the jurisdiction of the BCC for purposes of settling this matter, and that on one or more occasions between February 1, 2011, and August 6, 2012, Ball executed numerous transactions on the CME Globex electronic trading platform where there was the same beneficial ownership on both sides of the transactions in the Two-Year U.S. Treasury Notes, Five-Year U.S. Treasury Notes, 10-Year U.S. Treasury Notes, and 30-Year U.S. Treasury Bonds Futures markets. Ball intended to roll and flatten positions, and he knew or reasonably should have known that the buy and sell orders would trade opposite each other, and that in so doing, he would avoid taking a bona fide market position exposed to market risk. The Panel concluded that Ball thereby violated CME Rule 534.
In accordance with the settlement offer, the Panel ordered Ball to pay a fine of $7,500, and to have his access to all CME Group trading floors and direct access to all electronic trading and clearing platforms owned or controlled by CME Group suspended for 30 business days, beginning on the effective date below and continuing through and including July 9, 2015.
May 29, 2015
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