CME fines, suspends trader for engaging in disruptive practices in various Forex futures markets
CME Group has posted a notice of disciplinary action against Lei Shu. The trader will have to pay a fine and will be suspended from trading on CME floors because of violations of Exchange rules.
In particular, the Chief Regulatory Officer has charged Lei Shu with violating CME Rule 575.A. and Rule 432.L.1. based on allegations that on one or more occasions from March 2, 2021, through October 8, 2021, Shu layered orders near the top of the book in various foreign exchange futures markets, including Australian Dollar Futures, British Pound Futures, Canadian Dollar Futures, Euro FX Futures, Japanese Yen Futures, New Zealand Dollar Futures and Swiss Franc Futures.
Shu engaged in a pattern of entering or modifying multiple orders, typically of the same order size in the market at one or multiple price levels on the same side of the book and then canceling all of the orders within 10 seconds of placement of the first order.
Further, Shu failed to appear at a scheduled staff interview.
On April 25, 2023, a Hearing Panel Chair of the CME Business Conduct Committee (BCC) first determined that Shu, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Shu therefore waived his right to a hearing on the merits of the charges. Pursuant to CME Rule 408.F., a BCC Panel then found Shu guilty of committing the admitted charges and held a penalty hearing thereafter.
Based on the record and the Panel’s findings and conclusions, the Panel ordered that Shu pay a fine in the amount of $60,000, and permanently suspended Shu’s access to any trading floor owned or controlled by CME Group and direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.
The notice of disciplinary action is effective May 16, 2023.