NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Lei Shu

CME RULE VIOLATIONS:

Rule 575. Disruptive Practices Prohibited (in part)

A. 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.

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 September 12, 2022, the Chief Regulatory Officer charged Lei Shu with violating CME Rule 575.A. and Rule 432.L.1. based on allegations that on one or more occasions from March 2, 2021, through October 8, 2021, Shu layered orders near the top of the book in various foreign exchange futures markets, including Australian Dollar Futures, British Pound Futures, Canadian Dollar Futures, Euro FX Futures, Japanese Yen Futures, New Zealand Dollar Futures and Swiss Franc Futures. Shu engaged in a pattern of entering or modifying multiple orders, typically of the same order size in the market at one or multiple price levels on the same side of the book and then canceling all of the orders within 10 seconds of placement of the first order. Further, Shu 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 Shu, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Shu therefore waived his right to a hearing on the merits of the charges. Pursuant to CME Rule 408.F., a BCC Panel then found Shu 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 Shu pay a fine in the amount of $60,000, and permanently suspended Shu’s access to any trading floor owned or controlled by CME Group and direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.