NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

RAJASEKARAN VEERAMUTHU

EXCHANGE RULE:

NYMEX 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 February 26, 2015, a Panel of the Commodity Exchange (“COMEX”) Probable Cause Committee charged non-member Rajasekaran Veeramuthu (“Veeramuthu”) with violating NYMEX Rule 534 based on allegations that between November 21, 2012 and December 20, 2012, Veeramuthu and another trader at the same firm entered a series of wash trades in Silver options between accounts with the same beneficial owner.

On July 27, 2015, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) entered an order finding that Veeramuthu failed to answer the charges against him. The Hearing Panel Chair further ordered that Veeramuthu was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

On September 9, 2015, a penalty hearing was held before a panel of the COMEX BCC (“BCC Panel”) which found that Veeramuthu had committed the violations charged.

PENALTY:

In accordance with NYMEX Rule 402.B (Sanctions), the BCC Panel ordered Veeramuthu to (1) pay a fine in the amount of $50,000; and (2) be permanently banned from (a) applying for Membership at any CME Group exchange; (b) direct or indirect access to any trading or clearing platform owned or controlled by the CME Group, Inc.; and (c) access to any trading floor owned or operated by any CME Group, Inc. exchange.