NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

MIAO LIU

RULE VIOLATIONS:

EXCHANGE 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 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.

EXCHANGE RULE 539. PREARRANGED, PRE-NEGOTIATED, AND NONCOMPETITIVE TRADES PROHIBITED

No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction, except [when]…[t]he first party’s order is entered into the Globex platform first. The second party’s order may not be entered the Globex platform until a period of 5 seconds has elapsed from the time of entry of the first order.

FINDINGS:

On December 5, 2018, a Panel of the Commodity Exchange (“COMEX”) Probable Cause Committee (the “PCC Panel”) charged Miao Liu (“Liu”) with violating Exchange Rules 534 and 539 based on allegations that on several occasions between May 10, 2017 and May 12, 2017, Liu executed trades between accounts with the same beneficial owner in the Silver Futures market. The PCC Panel further found that, on multiple dates between May 19, 2017 and June 8, 2017, Liu prearranged and executed trades in the Silver Futures market in which the buy and sell orders were entered less than five seconds of each other.

On January 24, 2019, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) entered an order finding that Liu failed to answer the charges against him. The Hearing Panel Chair further ordered that Liu was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

On February 13, 2019, a penalty hearing was held before a panel of the COMEX BCC (“BCC Panel”) which found that Liu had committed the violations charged.

PENALTY:

In accordance with Exchange Rule 402.B (Sanctions), the BCC Panel ordered Liu to pay a total monetary fine in the amount of $50,000, e.g., $30,000 of the monetary fine is allocated to COMEX 17-0752-BC and $20,000 is allocated to NYMEX 17-0752-BC, and to serve a 2 year suspension of direct or indirect access to any CME Group Inc. trading floor or electronic trading or clearing platform owned or operated by CME Group Inc., including CME Globex. The suspension shall run from March 5, 2019 through and including March 5, 2021.