NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Yihang Choi

CBOT RULE VIOLATIONS:

CBOT 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.

A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

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

CBOT Rule 432.L.1. General Offenses

It shall be an offense to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

FINDINGS:

On June 17, 2022, the Chief Regulatory Officer of the CME Group’s Designated Contract Markets charged Yihang Choi with violations of CBOT Rules 575.A., 575.B., and 432.L.1. based on allegations that on one or more occasions in December 2020, Choi entered or caused to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution in March 2021 Wheat Futures, and he entered or caused to be entered an actionable or non-actionable message or messages with intent to mislead other market participants in March 2021 Wheat Futures. Specifically, Choi exhibited a pattern of entering a large order on one side of the market just prior to or just after placing a small order on the other side of the market. After his small order on the opposite side of the book was executed, Choi canceled his large order. Additionally, the Panel found that Choi failed to appear before Exchange staff at a scheduled staff interview.

On December 21, 2022, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) first determined that Choi, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Choi therefore waived his right to a hearing on the merits of the charges. Pursuant to CBOT Rule 408.F., a BCC Panel then found Choi 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 Choi to pay a fine in the amount of $40,000, disgorgement of profits of $1,362.50, and permanently suspended his 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.