EXCHANGE RULES: 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.
RULE 432: GENERAL OFFENSES (in part)
It shall be an offense:
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange;
Pursuant to an offer of settlement Panogiotis Salapatas (“Salapatas”) presented at a hearing July 24, 2014, in which Salapatas neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“BCC Panel”) found that Salapatas consented to the jurisdiction of the Exchange for purposes of resolving this matter and that for the time period May 2011 through November 2011, Salapatas directed the execution of a series of wash trades in Gold futures between two accounts with the same beneficial owner. In each of these instances, Salapatas was the sole decision maker for both the buy and sell side of the trades and directed traders to execute the wash trades. The Panel further found that Salapatas failed to diligently supervise these traders in that he was not familiar with Exchange rules and directed them to engage in wash trades, in violation of Exchange rules.
The Panel found that as a result of the foregoing, Salapatas violated Rules 534 and 432.W.
In accordance with the settlement offer and taking into consideration the financial condition of the Respondent when levying the sanction, the BCC Panel suspended Salapatas from all direct or indirect access to any trading floor or electronic trading or clearing platform owned or operated by CME Group Inc., including Globex, for a period of three months. The suspension will run from July 28, 2014 through October 20, 2014, inclusive.
July 28, 2014
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