CME RULE VIOLATIONS:
Rule 432 General Offenses (in part)
It shall be an offense:
G. To pre-arrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.
L.1. To fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.
On August 20, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Probable Cause Committee (“PCC”) charged non-member Xiang Hu (“Hu”) with violating CME Rules 432.G. and 432.L.1. based on allegations that on one or more occasions in August 2018, Hu prearranged the execution of transactions in the March 2019 E-mini Nasdaq 100 futures contract for the purpose of transferring equity between accounts and for Hu’s failure to appear before Exchange staff for a scheduled staff interview.
On March 12, 2020, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) first determined that Hu, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Hu, therefore, waived his right to a hearing on the merits of the charges. Pursuant to CME Rule 408.F., a BCC Panel then found Hu guilty of committing the admitted charges and held a penalty hearing thereafter.
Based on the record and the BCC’s findings and conclusions, the BCC ordered Hu to pay a fine in the amount of $40,000 ($30,000 of which is allocated to CME), and permanently barred his 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.