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 Christian Neuss (“Neuss”) neither admitted nor denied the rule violations upon which the penalty is based, on July 1, 2014, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that Neuss voluntarily submitted himself to the jurisdiction of the BCC for purposes of settling this matter and that on July 20, 2012, Neuss, an employee acting on behalf of Siemens, executed four trades on Globex totaling 4,000 Eurodollar options on futures contracts in which Siemens maintained ownership and control of the accounts on both sides of the transactions through different subsidiaries of Siemens. Neuss placed the orders with knowledge and intent that the orders would match opposite one another The purpose of these transactions was to liquidate one of the accounts because the account had reached its monthly loss limit. Mr. Neuss now understands that this type of transaction should be effected via a back office transfer.
The Panel concluded that Neuss thereby violated CME Rule 534.
In accordance with the settlement offer, the Panel ordered Neuss to pay a fine of $10,000. The Panel also suspended Neuss from all direct access to any trading floor or electronic trading or clearing platform owned or controlled by CME Group Inc. for a period of five business days. The suspension will run from July 3, 2014, through and including July 10, 2014.
July 3, 2014
Register for regular updates here and manage your email preferences.