CME Fines Individual for Spoofing

The Chicago Mercantile Exchange ("CME") fined and permanently suspended an individual for manipulative trading.

According to the Notice of Disciplinary Action, the individual "entered actionable messages in various Lean Hogs futures with the intent to mislead other market participants and receive favorable pricing." The CME found that the individual "exhibited a pattern of order entry and modification that alternated between creating buy-side pressure and sell-side pressure in order to induce market participants to trade into his smaller resting quantity on the opposite side of the market." The CME further found that, if a market participant improved the bid or offer after being misled by the market imbalance the individual created, he "aggressively traded into the improved price."

The CME also determined that the individual had failed to appear at a scheduled staff interview regarding the allegations, which led to his automatic admission of the charges against him.

The CME found that he violated Rule 432 ("General Offenses") and Rule 575.B ("Disruptive Practices Prohibited").

As a result of these violations, the CME ordered the individual to pay a fine of $115,000 and imposed a permanent suspension on his access to any trading floor owned or controlled by CME Group, as well as direct and indirect access to any designated contract market, derivatives clearing organization, or swap execution facility controlled by CME Group.