NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

TUJUN HONG

RULE VIOLATION:

CME RULE 432.G. MONEY PASS PROHIBITED

It shall be offense:

To prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.

CME 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.

FINDINGS:

On June 3, 2021, the CME Group Chief Regulatory Officer (“CRO”) charged Tujun Hong with violating CME Rules 432.G. and 576 based on allegations that, on trade dates August 21, 2019 and August 26, 2019, Hong, using his own, as well as others, Tag 50 User IDs, prearranged the execution of round-turn transactions in the S&P futures market between an account owned by Hong and another account owned by another individual for the purpose of transferring funds between these accounts.

On September 13, 2021, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) first determined that Hong, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Hong, therefore, waived his right to a hearing on the merits of the charges. Pursuant to CME Rule 408.F., a BCC Panel then found Hong 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 Hong to pay a fine in the amount of $85,000 ($5,000 of which is allocated to CME 20-1297-BC and $80,000 of which is allocated to NYMEX 20-1297-BC) and serve a five-year suspension 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.