NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 18-0859-BC

NON-MEMBER:

Hin Pang Kou

CBOT RULE VIOLATIONS:

CBOT Rule 575 Disruptive Practices Prohibited (in part)

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.

CBOT Rule 432 General Offenses (in part)

It shall be an offense:

L.1. To fail to appear before the Board, Exchange staff or any investigative or
hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation;

L.2. To fail to fully answer all questions or produce all books and records at
such hearing or in connection with any investigation, or to make false
statements.

FINDINGS:

On December 5, 2018, a Panel of the Chicago Board of Trade (“CBOT”) Probable Cause Committee (“PCC”) charged non-member Hin Pang Kou (“Kou”) with violating CBOT Rules 575.A., 432.L.1. and 432.L.2. based on allegations that on one or more occasions between March 2017 and November 2017, Kou engaged in disruptive trading activity in the September 2017 (“SEP17”) and December 2017 (“DEC17”) E-Mini Dow futures markets by entering orders without the intent to trade. Specifically, Kou typically entered a larger order, or layered orders, on one side of the market and then cancelled them after resting smaller orders on the opposite side of the book were executed. Additionally, during this time period, Kou also displayed a pattern of layering multiple orders across different price levels on a single side of the market over the course of several consecutive minutes during Asian and European trading hours in the SEP17 Dow market and DEC17 Dow markets without the intent of execution. Further, Kou failed to appear at a scheduled staff interview and failed to fully answer all questions in connection with the investigation.

On February 12, 2019, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) entered an order finding that Kou failed to answer the charges issued against him. In failing to answer the charges, the Hearing Panel Chair further ordered that Kou was deemed to have admitted the charges 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 March 6, 2019. The Panel found Kou guilty of committing the admitted charges.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Kou to pay a fine in the amount of $40,000, and to have his access to all CME Group trading floors and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group permanently barred.

EFFECTIVE DATE:

March 26, 2019