Rule 575.A. Disruptive Practices Prohibited
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 576. Identification of Globex Terminal Operators
Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using ID other than the individual’s own unique user ID.
On August 9, 2018, a Panel of the Commodity Exchange (“COMEX”) Probable Cause Committee (“PCC”) charged Xiaobao Huang (“Huang”) with violating Exchange Rules 575.A. and 576, based on allegations that on multiple trades dates between December 7, 2016 and December 14, 2016, while active in the March 2017 Copper (“MAR17 HG”) futures market, Huang, using a unique user TAG50 ID that had been registered to another individual, placed an order on one side of the market before he placed multiple orders, typically for twenty to thirty contracts, on the opposite side of the market, which Huang would cancel immediately after having received a fill on his initial order.
On October 11, 2018, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) entered an order finding that Huang failed to answer the charges against him. The Hearing Panel Chair further order that Huang was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.
On November 15, 2018, a penalty hearing was held before a panel of the COMEX BCC Panel which found that Huang had committed the violations charged.
In accordance with Exchange Rule 402.B. (Sanctions), the BCC Panel ordered Huang to pay a total monetary fine in the amount of $45,000 e.g., $22,500 of the monetary fine is allocated to COMEX 16-0605-BC and $22,500 is allocated to NYMEX 16-0605-BC, and to serve a permanent ban from membership privileges, access to 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.