CME fines, suspends trader for wash trades
CME Group has fined and suspended Chia-Chun Lin for violating the wash trades prohibition.
According to NYMEX rules:
“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”.
Pursuant to an offer of settlement in which Chia-Chun Lin neither admitted nor denied the rule violation or factual findings upon which the penalty is based, a Panel of the New York Mercantile Exchange Business Conduct Committee found that, on January 14, 2021, January 15, 2021, and January 19, 2021, Lin executed numerous wash trades in the April 2021 Platinum Futures market between accounts with common beneficial ownership in order to move positions between trading accounts.
The Panel concluded that Lin thereby violated NYMEX Rule 534.
In accordance with the settlement offer, the Panel ordered Lin to pay a fine in the amount of $20,000 and to serve a 10-business day suspension from 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.
The suspension will run through and including March 17, 2022.