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.
On August 9, 2018, a Panel of the New York Mercantile Exchange (“NYMEX”) Probable Cause Committee (“PCC”) charged Xiaobao Huang (“Huang”) with violating Exchange Rule 575.A., based on allegations that on multiple trades dates between December 7, 2016 and December 14, 2016, while active in the February 2017 Crude Oil (“FEB17 CL”) 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 NYMEX 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 NYMEX 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 NYMEX 16-0605-BC and $22,500 is allocated to COMEX 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.