EXCHANGE RULES: Rule 575.A. (DISRUPTIVE PRACTICES PROHIBITED)
All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.
A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.
Pursuant to an offer of settlement Joshua Bailer (“Bailer”) presented at a hearing on May 24, 2016, in which Bailer neither admitted nor denied the findings or rule violation upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that Bailer was subject to the jurisdiction of the Exchange pursuant to Rules 402 and 418, and that on multiple trade dates during the time period from October 2014 through January 2015, Bailer entered large orders without the intent to trade. Specifically, he entered these large orders to obtain fills on the smaller orders he had placed on the opposite side of the order book. After receiving a fill on his smaller orders, Bailer would cancel the resting orders he had entered on the opposite side of the order book within several seconds.
The Panel found that as a result of the above, Bailer violated Exchange Rule 575.A.
In accordance with the settlement offer, the Panel ordered Bailer to: 1) pay a $35,000 fine; and 2) serve a ten (10) business day suspension of any access to any CME Group Inc. trading floor and of 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 May 26, 2016 through June 9, 2016, inclusive.