NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:           

Wang Yao

CBOT 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 Wang Yao 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, Yao entered buy and sell orders in the November 2020 Soybean futures contract market that matched opposite each other for accounts with common beneficial ownership. Yao entered the opposing orders to transfer positions between accounts owned by his employer. The Panel further found that Yao 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 concluded that Yao thereby violated CBOT Rule 534.

PENALTY:                   

In accordance with the settlement offer, the Panel ordered Yao to pay a fine in the amount of $15,000. The Panel also suspended Yao 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 five business days beginning on the effective date, through October 27, 2021, inclusive.

EFFECTIVE DATE:                         

October 21, 2021