CME Fines Individual for Wash Trades

The Chicago Mercantile Exchange ("CME") fined and suspended an individual for engaging in wash trades and using another individual's unique Operator ID to enter orders on the CME Globex trading platform.

According to the Order, the trader entered orders in various Swiss Franc, Japanese Yen, Australian Dollar, and Euro futures and options contracts and used an Operator ID belonging to another individual to enter orders in Japanese Yen put options. The CME found that the individual "entered the foreign exchange futures and options orders 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." The CME found that he did this "to reduce or close positions in his accounts to establish losses and limit his tax exposure."

The CME said the individual failed to answer to the charges against him, and "was deemed to have admitted the charges." The CME found that the individual violated Rule 534 ("Wash Trades Prohibited") and Rule 576 ("Identification of Globex Terminal Operators").

The CME ordered the individual to pay $50,000 and suspended his 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."