• NOTICE OF DISCIPLINARY ACTION

      • #
      • NYMEX 17-0752-BC-4
      • Effective Date
      • 22 April 2019
    • NON-MEMBER:

      HONGFENG WANG

      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:

      Pursuant to an offer of settlement that Hongfeng Wang (“Hongweng”) presented at a hearing on April 17, 2019, in which Hongfeng neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC Panel”) found that between May 10, 2017 and May 12, 2017, several traders employed by Hongfeng executed numerous trades in the Crude Oil Futures market between accounts owned by Hongfeng. The Panel also found that on multiple dates between May 19, 2017 and June 8, 2017, several traders employed by Hongfeng prearranged and executed trades in the Crude Oil Futures market in which the buy and sell orders were entered less than five seconds of each other.

      The Panel concluded that Hongfeng violated Exchange Rules 534 (“Wash Trades Prohibited”) and 539 (“Prearranged, Pre-Negotiated, and Noncompetitive Trades Prohibited”).

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Hongfeng to pay a total fine in the amount of $30,000, i.e., $10,000 of the monetary fine is allocated to NYMEX 17-0752-BC and $20,000 is allocated to COMEX 17-0752-BC., and to serve a 6-month 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 April 22, 2019 through, and including, October 22, 2019.