NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 19-1107-BC

NON-MEMBER:

Mehran Khorrami

CME RULE VIOLATION:

Rule 534 Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash trades or wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

FINDINGS:

Pursuant to an offer of settlement in which Mehran Khorrami (“Khorrami”) neither admitted nor denied the rule violations upon which the penalty is based, on April 20, 2020, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on trade date February 8, 2019, Khorrami entered matching buy and sell orders on the CME Globex trading platform in the March 2019 British Pound futures, March 2019 Swiss Franc futures, March 2019 Euro FX futures, and March 2019 Japanese Yen futures contracts on behalf of his client’s accounts with common beneficial ownership on both sides of the transactions. Khorrami executed the opposing buy and sell orders with the knowledge and intent that the orders would trade opposite one another for the purpose of transferring the positions between accounts.

The Panel concluded that Khorrami thereby violated CME Rule 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered Khorrami to pay a fine of $30,000. The Panel also suspended Khorrami 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 ten (10) business days, beginning on the effective date below and continuing through and including May 20, 2020.

EFFECTIVE DATE:

May 7, 2020