• NOTICE OF DISCIPLINARY ACTION

      • #
      • COMEX 17-0630-BC
      • Effective Date
      • 30 October 2018
    • NON-MEMBER:

      SHI BING CHENG

      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.

      RULE 575 D. DISRUPTIVE PRACTICES PROHIBITED

      D. No person shall enter or cause to be entered an actionable or non-actionable message with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

      RULE 432.L. GENERAL OFFENSES (IN PART)

      It shall be an offense:

      L.1. to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

      FINDINGS:

      On June 5, 2018, a Panel of the Commodity Exchange (“COMEX”) Probable Cause Committee charged Shi Bing Cheng (“Cheng”) with violating NYMEX Rules 575.A., 575.D. and 432.L.1., based on allegations that: 1) on one or more occasions from November 22, 2016 to November 23, 2016, Cheng entered orders in Copper and Silver futures with the intent, at the time of order entry, to cancel the orders before execution to avoid execution; 2) on December 14, 2016, Cheng entered actionable messages in Copper futures with reckless disregard for the adverse impact on the orderly conduct of trading or the fair execution of transactions; and 3) Cheng failed to appear before Exchange stuff for a scheduled staff interview.

      On August 8, 2018, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) entered an order finding that Cheng failed to answer the charges against him. The Hearing Panel Chair further ordered that Cheng was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

      On October 10, 2018, a penalty hearing was held before a panel of the COMEX BCC (“BCC Panel”) which found that Cheng had committed the violations charged.

      PENALTY:

      In accordance with NYMEX Rule 402.B (Sanctions), the BCC Panel ordered Cheng to (1) pay a $75,000 fine to the Exchange in connection with this case and companion case NYMEX 17-0630-BC ($50,000 of which is allocated to COMEX); and (2) be permanently banned from (a) applying for Membership at any CME Group exchange; (b) direct or indirect access to any trading or clearing platform owned or controlled by the CME Group, Inc.; and (c) access to any trading floor owned or operated by any CME Group, Inc. exchange, including CME Globex.