NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Tae Sung Kim

CME RULE VIOLATIONS:

Rule 539.A. General Prohibition (in part)

No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction.

FINDINGS:

On March 16, 2022, the Chief Regulatory Officer charged Tae Sung Kim with violating CME Rule 539.A. based on allegations that on one or more occasions between January 2019, and September 2020, Kim prearranged or pre-negotiated the purchase or sale of E-Mini NASDAQ 100 futures on Globex. Specifically, Kim engaged in a pattern of trading in pairs wherein a sub-group of passive participants entered orders on either the buy or sell side past the first or second book level of the available market. A separate sub-group of aggressive participants would quickly trade against these resting orders. As a part of this pattern, the passive participant entered smaller orders, typically for one to two contracts, while the aggressive participant entered large orders, usually for 30 contracts, on the opposite side of the market, and traded opposite the passive participant. The aggressive order was typically placed within five seconds of the initial, passive orders placement.

On March 15, 2023, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) first determined that Kim, having failed to submit a written answer to the charges issued against him was deemed to have admitted the charges. Kim therefore waived his right to a hearing on the merits of the charges. Pursuant to CME Rule 408.F., a BCC Panel then found Kim 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 Kim pay a fine in the amount of $45,000 ($30,000 of which is allocated to CME), disgorgement of profits of $48,310 ($39,527.24 of which is allocated to CME), and suspended Kim’s 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 one year, beginning on the effective date and continuing for one year from the date that the ordered fine and disgorgement of profits are paid.

EFFECTIVE DATE:

April 5, 2023