CME fines Shay Capital for alleged rule violations
CME Group has posted a notice of disciplinary action as to Shay Capital LLC.
Pursuant to an offer of settlement in which Shay Capital LLC neither admitted nor denied the rule violations or factual findings upon which the penalty is based, a Panel of the Chicago Mercantile Exchange (CME) Business Conduct Committeefound that on multiple occasions between January 1, 2020, and August 31, 2020, a trader employed by Shay entered buy and sell orders in various E-mini S&P 500 futures that matched between two Shay accounts with common beneficial ownership.
Shay’s trader reasonably should have known that the execution of the orders would result in a prohibited wash result. The purpose of the orders was to hedge overnight exposure.
The Panel also found that Shay failed to diligently supervise its employee through appropriate training to prevent violations of Exchange rules pertaining to wash trades.
The Panel concluded that Shay thereby violated CME Rules 432.W. And 534 (Wash Trades Prohibited).
In accordance with the settlement offer, the Panel ordered Shay to pay a $40,000 fine.