• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-18-1009-BC
      • Effective Date
      • 16 March 2020
    • FILE NO.:

      CME 18-1009-BC

      MEMBER:

      Macquarie Futures USA LLC

      CME RULE VIOLATIONS:

      Rule 432 General Offenses (in part)

      It shall be an offense:

      Q. To commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange.

      W. It shall be an offense for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

      FINDINGS:

      Pursuant to an offer of settlement in which Macquarie Futures USA LLC (“MFUSA”) neither admitted nor denied the rule violations upon which the penalty is based, on March 12, 2020, a Panel of the CME Business Conduct Committee (“Panel”) found that on June 29, 2017, MFUSA failed to diligently supervise its employees and agents in the set-up of accounts and the application of trading limits for those accounts it cleared. Specifically, as a result of its corporate and operating structure, MFUSA had risk management responsibility for certain activity of one of its affiliates. A customer of the affiliate manually entered numerous orders in the September 2017 E-Mini S&P (“SEP17 E-Mini”) futures contract which established long positions in an account far beyond the risk parameters MFUSA, as risk manager, should have imposed on the account. This activity followed a large reimport of trades into MFUSA’s IT system that caused delays in its risk management system which prevented MFUSA from identifying the activity in real time. MFUSA’s lack of oversight allowed the trader to access CME Group markets with inadequate risk limits and credit limits well in excess of the funds available in the account.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered MFUSA to pay a fine in the amount of $150,000.

      EFFECTIVE DATE:

      March 16, 2020