Ryan Van Zee
CME RULE VIOLATIONS:
Rule 534 (“Wash Trades Prohibited”) (in part)
No person shall place or accept buy and sell orders in the same product and expiration month . . . 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 should 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 Ryan Van Zee (“Van Zee”) neither admitted nor denied the rule violations upon which the penalty is based, on December 16, 2015, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that Van Zee was subject to the jurisdiction of the Exchange pursuant to Rules 402 and 418. The Panel also found that on several occasions in February and December 2012, Van Zee executed customer orders on the CME Globex trading platform in the expiring Live Cattle futures contract where there was common beneficial ownership on both sides of the transactions. On two occasions, Van Zee entered opposing buy and sell orders, at the same price and for the same quantity, on behalf of different accounts owned by the same customer that traded against one another. In the remaining instances, Van Zee entered customer orders on one side of the market that traded opposite opposing orders placed by a colleague for the same customer on the other side of the market. On each occasion, the orders traded entirely against opposing orders placed for an account with common beneficial ownership. Van Zee entered the orders for the purpose of freshening long futures position dates for customers, and he knew or reasonably should have known that the orders he placed would trade opposite orders placed for accounts with common beneficial ownership. The Panel concluded that Van Zee thereby violated CME Rule 534.
In accordance with the settlement offer, the Panel ordered Ryan Van Zee to pay a fine of $15,000 and suspended his direct access to any trading floor or electronic trading or clearing platform owned or operated by CME Group, including Globex, for 15 business days. Van Zee’s suspension will run from December 18, 2015, to January 11, 2016, inclusive.
December 18, 2015