NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

ZHIFENG LIANG

COMEX RULES:

RULE 432. GENERAL OFFENSES (IN PART)

It shall be an offense:

B. 1. to engage in fraud or bad faith;

2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;

C. to engage in dishonest conduct;

RULE 530. PRIORITY OF CUSTOMERS' ORDERS (IN PART)

No person shall enter an order into the Globex platform for his own account, an account in which he has a direct or indirect financial interest or an account over which he has discretionary trading authority, including, without limitation, an order allowing discretion as to time and price, when such person is in possession of any order for another person that the Globex platform is capable of accepting.

RULE 532. DISCLOSING ORDERS PROHIBITED

No person shall disclose another person's order to buy or sell except to a designated Exchange official or the CFTC, and no person shall solicit or induce another person to disclose order information. An order for pit execution is not considered public until it has been bid or offered by open outcry. No person shall take action or direct another to take action based on non-public order information, however acquired. The mere statement of opinions or indications of the price at which a market may open or resume trading does not constitute a violation of this rule.

FINDINGS:

On July 30, 2021, the Chief Regulatory Officer of CME Group’s Market Regulation Department charged Zhifeng Liang with violating COMEX Rules 432.B.1., 432.B.2., 432.C., 530 and 532 based on allegations that between June 5, 2018, and February 28, 2020, Liang engaged in fraud and dishonest conduct by knowingly and willfully taking positions in the Copper futures market to offset those positions against orders he placed on behalf of his employer. Liang took advantage of information only he was privy to about his employer’s forthcoming orders in placing these orders, resulting in a profit of $177,625 to his personal trading account.

On March 2, 2022, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) first determined that Liang, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Liang therefore waived his right to a hearing on the merits of the charges. Pursuant to COMEX Rule 408.F., a BCC Panel then found Liang 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 Liang to pay a fine in the amount of $200,000, disgorge profits in the amount of $177,625, and permanently barred Liang 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.