NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Er Wei Zhao

COMEX 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.

FINDINGS:

On August 20, 2019, a Panel of the Commodity Exchange (“COMEX”) Probable Cause Committee (“PCC”) charged non-member Er Wei Zhao (“Zhao”) with violating COMEX Rule 432.G. based on allegations that on one or more occasions in May 2018, Zhao prearranged the execution of transactions in the December 2019 Gold futures contracts for the purpose of transferring equity between accounts.

On March 12, 2020, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) first determined that Zhao, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Zhao, therefore, waived his right to a hearing on the merits of the charges. Pursuant to COMEX Rule 408.F., a BCC Panel then found Zhao guilty of committing the admitted charges and held a penalty hearing thereafter.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Zhao to pay a fine in the amount of $40,000 ($30,000 of which is allocated to COMEX), and suspended Zhao 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 two years, beginning on the effective date below and continuing for two years from the date that the ordered fine is paid.

EFFECTIVE DATE:

April 3, 2020