NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Chunyu Mao

CME RULE VIOLATION:

Rule 575. Disruptive Practices Prohibited (in part)

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.

D. No person shall enter or cause to entered an actionable or non-actionable message(s) with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

Rule 432 General Offenses (in part)

It shall be an offense:

W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

Market Regulation Advisory Notice 2114-5 Supervisory Responsibility for Employees and Agents (in part)

Pursuant to Rule 432.W. (“General Offenses”), it is an offense for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the CME Group Exchanges. For avoidance of doubt, agents include any automated trading systems (“ATSs”) operated by any party.

FINDINGS:

Pursuant to an offer of settlement in which Chunyu Mao neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on February 27, 2024, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that from March 8, 2020, through July 17, 2022, Mao used an automated trading system (“ATS”) to enter orders to be executed at a later date and time. On multiple occasions during the review period, Mao’s orders aggressively traded through numerous price levels and caused disruptive price movements and reversions in several CME Eurodollar, Currency, and Livestock futures markets. The Panel further found that Mao failed to monitor the execution of his orders and failed to consider current market conditions prior to allowing the ATS to place the orders.

The Panel concluded that as a result of the foregoing, Mao violated CME Rules 575.D. and 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered Mao to pay a fine of $20,000 and serve a 30-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 begin on the effective date and continue for 30-trading days from the date that the ordered fine is paid.