NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Kyoung Wook Cho

CME RULE VIOLATIONS:

Rule 534. Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

Rule 576. Identification of Globex Terminal Operations

Each Globex Terminal Operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If operator IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique operator ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using an operator ID other than the individual’s own unique operator ID.

Rule 432. General Offenses (in part)

It shall be an offense:

L.1. 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 December 13, 2022, the Chief Regulatory Officer charged Kyoung Wook Cho with violating CME Rules 534, 576, and 432.L.1 based on allegations that on one or more occasions from January 8, 2021, through February 16, 2021, Cho entered orders in the March 2021 E-mini Nasdaq-100 futures market where he knew or reasonably should have known the purpose of the orders was to avoid taking a bona fide market position exposed to market risk. Additionally, Cho entered orders on Globex using an operator ID other than his own unique operator ID. Further, Cho failed to appear at a scheduled staff interview.

On April 25, 2023, a Hearing Panel Chair of the CME 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 CME 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 that Cho pay a fine in the amount of $35,000, and permanently suspended Cho’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.