• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT 20-1391-BC
      • Effective Date
      • 21 October 2021
    • NON-MEMBER:           

      Guangdong HAID Group Co. Ltd.

      CBOT RULE VIOLATIONS:             

      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.

      Rule 432. General Offenses (in part)

      It shall be an offense:

      W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchan   

      FINDINGS:                    

      Pursuant to an offer of settlement in which Guangdong HAID Group Co. Ltd. neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on October 19, 2021, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on September 8, 10, and 11, 2020, an employee of HAID Group entered buy and sell orders in the November 2020 Soybean futures contract market that matched opposite each other for accounts with common beneficial ownership. The HAID Group employee entered the opposing orders to transfer positions between accounts held by HAID Group subsidiaries. HAID Group knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk. The Panel further found that HAID Group failed to diligently supervise its employee by not properly training them as to Exchange Rules pertaining to wash trades.

      The Panel concluded that HAID Group thereby violated CBOT Rules 534 and 432.W.

      PENALTY:                   

      In accordance with the settlement offer, the Panel ordered HAID Group to pay a fine in the amount of $50,000.

      EFFECTIVE DATE:                         

      October 21, 2021