NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

KYUNGCHUL CHO

COMEX RULES:

Rule 575. Disruptive Practices Prohibited (In Part)

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.

FINDINGS:

On July 19, 2022, the Chief Regulatory Officer of CME Group’s Market Regulation Department issued charges against Kyungchul Cho for violating COMEX Rules 575.A. and 575.B. based on allegations that from June 21, 2020, through October 1, 2020, Cho entered orders in various Gold futures markets: (1) with the intent, at the time of order entry, to cancel those orders before execution or to modify the orders to avoid execution; and (2) with the intent to mislead other market participants. Specifically, Cho layered orders into the market for the purpose of observing how the market would react. Cho entered, on average, eight two-lot orders. Shortly after entering those orders, Cho received fills on smaller orders, mostly a single two-lot order, on the opposite side of the market. Subsequently, the layered two-lot orders were canceled. Cho admitted that he did not intend to trade all the orders that he entered in the market.

On December 15, 2022, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) first determined that Cho, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Cho therefore waived his right to a hearing on the merits of the charges. Pursuant to COMEX Rule 408.F., a BCC Panel then found Cho 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 Cho to pay a fine in the amount of $60,000 and be suspended from direct 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 a period of five years, beginning on the effective date and continuing for five years from the date that the ordered fine is paid.