Rule 432 (“General Offenses”) (in part)
It shall be an offense:
G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.
Rule 576 (Identification of Globex Terminal Operators (in part)
Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.
Pursuant to an offer of settlement in which Dauren Badayev neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on March 12, 2020, a Panel of the Commodity Exchange (“COMEX”) Business Conduct Committee (“Panel”) found that between November 20, 2017, and December 14, 2017, Badayev executed a series of round-turn transactions in several February, April and May 2018 Gold Call Options markets on the CME Globex electronic platform between four individual accounts owned by clients of Badayev’s employer and an account in Badayev’s wife’s name, as well as between an individual account over which Badayev had trading discretion and Badayev’s wife’s account. The purpose of these round-turn transactions was to transfer over $11,000 on both CME and COMEX from the individual accounts to Badayev’s wife’s account. The Panel further found that the funds that were transferred from the individual accounts to Badayev’s wife’s account were reimbursed. Additionally, Badayev entered an order using a user ID other than his own unique user ID.
The Panel concluded that Badayev thereby violated COMEX Rule 432.G. and Rule 576.
In accordance with the settlement offer and after taking Badayev’s financial condition into consideration when it levied the sanction, the Panel ordered Badayev to pay a fine in the amount of $5,000 ($2,500 of which is allocated to COMEX), and suspended Badayev 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 for one year, beginning on the effective date below.
March 16, 2020