• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME 17-0634-BC
      • Effective Date
      • 22 February 2019
    • FILE NO.:

      CME 17-0634-BC

      NON-MEMBER:

      Sergey Kondrashev

      CME RULE VIOLATIONS:

      Rule 534 Wash Trades Prohibited

      No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash trades or wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

      Rule 576 Identification of Globex Terminal Operators

      Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, an 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.

      FINDINGS:

      Pursuant to an offer of settlement in which Sergey Kondrashev (“Kondrashev”) neither admitted nor denied the rule violations upon which the penalty is based, on (insert date), a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on several trade dates in June 2017, Kondrashev executed transactions on the CME Globex trading platform in the September 2017 E-Mini C2500 futures contracts for his employer’s accounts where there was common beneficial ownership on both sides of the transactions. Kondrashev executed the opposing buy and sell orders with the knowledge and intent that the orders would trade opposite one another. The Panel further found that during this time period, Kondrashev used Tag50 user IDs assigned to other employees within the same company to enter orders on Globex.
      The Panel concluded that Kondrashev thereby violated CME Rules 534 and 576.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Kondrashev to pay a fine of $10,000, and to have his access to all CME Group trading floors and direct and indirect access to all electronic trading and clearing platforms owned and controlled by CME Group suspended for 15 business days, beginning on February 22, 2019 and continuing through and including March 14, 2019.

      EFFECTIVE DATE:

      February 22, 2018