NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Mayank Ajay Pandya

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.

FINDINGS:

On November 10, 2023, the Chief Regulatory Officer issued charges against Mayank Ajay Pandya for violating CME Rule 534 based on allegations that on one or more occasions from September 19, 2022, to September 20, 2022, Pandya entered orders in various E-Mini S&P 500 Options contracts 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. More specifically, Pandya’s employer intended to exit the existing positions to avoid a margin call. Pandya accommodated his employer by entering orders for a firm account that the employer partially owned, while his employer entered opposing orders for a personal account owned by the employer. As the opposing orders were entered for the respective accounts at the same price and either the same quantity or for orders with quantities that summed to the larger order quantity entered by Pandya’s employer, they matched and resulted in wash trades. As a result of these trades with Pandya’s employer, the employer benefitted by increasing the available margin in his personal account and thereby avoiding a margin call to the employer’s overall group of accounts.

On February 27, 2024, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) first determined that Pandya, having failed to submit a written answer to the charge issued against him, was deemed to have admitted the charge. Pandya therefore waived his right to a hearing on the merits of the charge. Pursuant to CME Rule 408.F., a BCC Panel then found Pandya guilty of committing the admitted charge and held a penalty hearing thereafter.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered that Pandya pay a fine in the amount of $50,000 and suspended Pandya’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 five years, beginning on the effective date and continuing for five years after the ordered fine is paid in full.