CME RULE VIOLATION:
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 James Roemer (“Roemer”) neither admitted nor denied the rule violations upon which the penalty is based, and after voluntarily submitting himself to the jurisdiction of the Exchange for purposes of settling this matter, on October 20, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that between January 2012, and February 2013, Roemer executed numerous transactions for two accounts over which he maintained control in various weather products where there was common beneficial ownership on both sides of the transactions. Roemer placed the opposing buy and sell orders with knowledge and intent that the orders would trade opposite each other for the purpose of liquidating positions, transferring positions from one account to another, and avoiding maintenance margin requirements. The Panel concluded that Roemer thereby violated CME Rule 534.
In accordance with the settlement offer, the Panel ordered Roemer to pay a fine in the amount of $10,000 and serve a 15 business day suspension 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., including CME Globex. The suspension shall run from October 22, 2015, through November 11, 2015, inclusive.
October 22, 2015
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