CME RULE VIOLATIONS:
Rule 575 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 an intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.
Rule 576 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 a user ID other than the individual’s own unique user ID.
Pursuant to an offer of settlement in which Jason Berry (“Berry”) neither admitted nor denied the rule violations upon which the penalty is based, on December 11, 2018, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that on various dates between June 28, 2016, and September 19, 2016, Berry entered and canceled crossed-market orders in the E-mini S&P 500 markets on the Globex electronic trading platform during the pre-opening period that were not entered for the purpose of executing bona fide transactions, but for the purpose of identifying the depth of the order book. The entry and cancellation of these orders caused fluctuations in the publicly displayed Indicative Opening Price. In addition, Berry permitted an employee to use the unique Tag50 User ID registered to him to enter trades on Globex. The Panel thus concluded that Berry thereby violated CME Rules 575.A. and 576.
In accordance with the settlement offer, the Panel ordered Berry to pay a fine of $15,000. The Panel also suspended Berry from access to any CME Group trading floor and direct and indirect access to all electronic trading and clearing platforms owned or operate by CME Group for 20 business days, beginning on the effective date below and continuing through and including January 11, 2019.
December 13, 2018