EXCHANGE RULES: RULE 575.A. DISRUPTIVE PRACTICES PROHIBITED (IN PART)
No person shall enter or cause to be entered an order with the intent, at the time of the order entry, to cancel the order before execution or to modify the order to avoid execution.
Pursuant to an offer of settlement in which Deepak Gautam (“Gautam”) neither admitted nor denied any rule violations upon which the penalty is based, on August 30, 2017, a Panel of the Commodity Exchange (“COMEX”) Business Conduct Committee (“BCC” or “Panel”) found that, on certain dates between December 2015 and April 2016, Gautam entered multiple larger orders in the Silver Futures contract market without the intent to trade. Specifically, the Panel found that Gautam’s trading strategy involved entering multiple larger orders on one side of the market and then cancelling them after smaller-sized orders on the opposite side of the book traded. The Panel found that the effect of this strategy was to induce other market participants to trade opposite the smaller resting orders.
The Panel concluded that Gautam thereby violated Exchange Rule 575.A.
In accordance with the settlement offer, and in connection with this case and companion case NYMEX 16-0434, the BCC Panel ordered Gautam to pay a fine in the amount of $7,000 and serve a 3 month suspension of direct or indirect access to any CME Group Inc. trading floor or electronic trading or clearing platform owned or operated by CME Group Inc., including CME Globex ($5,000 of which is allocated to COMEX). The suspension shall run from September 1, 2017 through, and including, December 1, 2017. The Panel took financial condition into account when levying the fine.