NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Geunyeong Han

COMEX RULE VIOLATIONS:

Rule 575 Disruptive Practices Prohibited (in part)

All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.

B. No person shall enter or cause to be entered an actionable or non-actionable message(s) with intent to mislead other market participants.

Rule 432 General Offenses (in part)

It shall be an offense:

L.1. to fail to appear before the Board, Exchange staff or any investigation or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

FINDINGS:

On February 17, 2022, the Chief Regulatory Officer issued charges against Geunyeong Han for violating COMEX Rules 575.B. and 432.L.1. based on allegations that from June 26, 2019, through November 11, 2019, Han entered actionable messages in various Silver, Copper, and Gold futures with the intent to mislead other market participants and receive favorable pricing. Han exhibited a pattern of order entry and modification that alternated between creating buy-side pressure and sell-side pressure in order to induce market participants to trade into his resting quantity on the opposite side of the market. Han subsequently entered new orders or modified resting orders to create a disproportionate quantity of contracts on one side of the market at the top levels of the order book. The imbalance induced market participants to trade into orders he entered or modified on the opposite side of the market or allowed him to aggress into resting orders at beneficial prices after the market turned as a result of his two-sided layered quantities. In instances where Han’s order modifications created a sudden absence of resting quantity at the top of the order book, Han induced market participants to either trade into his resting orders on the same side of the order book where the majority of his exposure existed or, alternatively, he traded into other market participants’ resting orders following a beneficial price move caused by his order modifications. As a result of this activity, Han netted $889,182.50 in benefits.

The Panel further found that Han failed to appear at an interview scheduled with Market Regulation staff on February 5, 2020.

On September 22, 2022, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) found that Han failed to submit a written answer to the charges issued against him and that Han was deemed to have admitted the charges. Han therefore waived his right to a hearing on the merits of the charges.

Pursuant to COMEX Rule 408.F., a BCC Panel found Han 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 that Han to pay a $90,000 fine in connection with this case and companion cases CBOT 19-1223-BC and NYMEX 19-1223-BC ($30,000 of which is allocated to COMEX) and disgorge profits in the amount of $889,182.50. The Panel also permanently suspended Han from direct access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivates clearing organization, or swap execution facility owned or controlled by CME Group beginning on the effective date below.

EFFECTIVE DATE:

October 10, 2022