NYMEX RULE VIOLATIONS:
Rule 432. General Offenses
It shall be an offense:
G. To pre-arrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.
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.
Rule 576. Identification of Globex Terminal Operators
Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. 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.
On August 7, 2020, the New York Mercantile Exchange (“NYMEX”) Chief Regulatory Officer issued charges against non-member Qin Han (“Han”) for violating NYMEX Rules 432.G., 432.W. and 576 based on allegations that between December 26, 2018, to January 24, 2019, Han pre-arranged the execution of transactions in various Natural Gas futures markets for the purpose of transferring equity between accounts. During the same timeframe, Han also failed to diligently supervise her employees in the conduct of their business relating to the Exchange and permitted the entry of an order by another person using her unique Tag50 User ID.
On February 4, 2021, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) first determined that Han, having failed to submit a written answer to the charges issued against her, was deemed to have admitted the charges. Han, therefore, waived her right to a hearing on the merits of the charges. Pursuant to NYMEX Rule 408.F., a BCC Panel then found Han guilty of committing the admitted charges and held a penalty hearing thereafter.
Based on the record and the Panel’s findings and conclusions, the Panel ordered Han to pay a fine in the amount of $85,000, pay disgorgement of $125,940 and permanently suspended Han 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.
February 26, 2021