• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-17-0783-BC
      • Effective Date
      • 03 September 2019
    • FILE NO.:

      CME 17-0783-BC

      NON-MEMBER:

      Deepak Patwari

      CME 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 legitimate purposes.

      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.

      FINDINGS:

      On April 24, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Probable Cause Committee (“PCC”) charged non-member Deepak Patwari (“Patwari”) with violating CME Rule 575.A. based on allegations that between February 1, 2017, and August 1, 2017, Patwari entered orders in CME Live Cattle 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 July 25, 2019, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) entered an order finding that Patwari failed to answer the charge issued against him. In failing to answer the charge, the Hearing Panel Chair further ordered that Patwari was deemed to have admitted the charge issued and waived his right to a hearing on the merits of the charge.

      Pursuant to CME Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on August 13, 2019. The Panel found Patwari guilty of committing the admitted charge.

      PENALTY:

      Based on the record and the Panel’s findings and conclusions, the Panel ordered that Patwari pay a fine of $50,000. The Panel also suspended Patwari from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group Inc. for a period of one year, beginning on the effective date below and continuing through and including September 3, 2020.

      EFFECTIVE DATE:

      September 3, 2019