CBOT RULE VIOLATION:
Rule 575 Disruptive Practices Prohibited (in part)
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
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.
On October 11, 2018, a Panel of the Chicago Board of Trade (“CBOT”) Probable Cause Committee (“PCC”) charged non-member Ji-Neng Tsai (“Tsai”) with violating CBOT Rule 575.A. based on allegations that between July 13, 2015, and April 11, 2016, Tsai entered orders in CBOT Oats and Rough Rice markets on the CME 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 depth of the order book. The entry and cancelation of these orders caused fluctuations in the publicly displayed Indicative Opening Price.
On January 9, 2019, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) entered an order finding that Tsai failed to answer the charge issued against him. In failing to answer the charge, the Hearing Panel Chair further ordered that Tsai was deemed to have admitted the charge issued and waived his right to a hearing on the merits of the charges.
Pursuant to CBOT Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on February 20, 2019. The Panel found Tsai guilty of committing the admitted charge.
Based on the record and the Panel’s findings and conclusions, the Panel ordered that Tsai pay a fine of $50,000. The Panel also suspended Tsai from all direct and indirect access to any trading floor or electronic trading or clearing platform owned or operated by CME Group Inc. The suspension shall begin on March 13, 2019, and last for one year from the date the fine is paid in full.
March 13, 2019