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.
Pursuant to an offer of settlement in which Vincent Bucci neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, on November 15, 2023 a Panel of the COMEX Business Conduct Committee (“Panel”) found that on June 30, July 6, and July 7, 2021, Mr. Bucci and a colleague placed opposing orders in COMEX Copper Futures Calendar Spreads for accounts with common beneficial ownership for the purpose of transferring positions between accounts, resulting in those orders trading opposite one another. Mr. Bucci placed the opposing buy and sell orders with the knowledge and intent that the orders would trade opposite each other. Mr. Bucci based these trading decisions on incorrect information he received from within his company that he could not request a back-office transfer at the accounts' clearing member firm. Based on training he received from his company on June 23, 2021, Mr. Bucci reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk.
The Panel found that as a result of the foregoing, Mr. Bucci violated COMEX Rule 534 (“Wash Trades Prohibited”).
In accordance with the settlement offer, the Panel ordered Mr. Bucci pay a fine to the Exchange in the amount of $15,000 and serve a five-business-day suspension from 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. The suspension shall run from trade date November 17, 2023 through, and including, trade date November 23, 2023.