International derivatives marketplace CME Group has posted a notice of disciplinary action against a trader.

The Chief Regulatory Officer has issued charges against the trader for violating CBOT Rules 575.A., 575.B., and 575.D. based on allegations that from December 19, 2018, through November 8, 2019, the trader entered orders for Soybean, Soybean Meal, and Soybean Oil futures without the intent to trade but with the intent to cancel the orders before execution or modify the orders to avoid execution.

The trader also entered the orders with the intent to mislead other market participants and with the intent to disrupt, or with reckless disregard for the adverse impact on the orderly conduct of trading or the fair execution of transactions.

Specifically, the trader entered orders for large quantities on one side of the market along with orders for small quantities on the opposite side of the same market. Once the small-quantity orders traded, the trader fully canceled the large-quantity orders. The trader also followed this same pattern of order entry and cancelation in related markets, whereby he entered large-quantity orders in one market along with small-quantity orders on the opposite side in a related market.

In addition, the trader entered and quickly canceled large orders at the front of the order book with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

Further, from September 24, 2019, through January 23, 2020, the trader entered orders during the pre-open period in the Soybean, Soybean Meal, and Soybean Oil futures markets with the intent, at the time of order entry, to cancel or modify the order before execution. Many of the trader’s orders during these pre-open periods affected the indicative opening price to a degree that the trader would be able to detect the presence or absence of iceberg and stop orders.

Further, the trader continued to engage in this non-bona fide and disruptive activity after he received a warning that it appeared to violate exchange rules.

On May 17, 2023, a Hearing Panel Chair of the CBOT Business Conduct Committee (BCC) found that the trader failed to submit a written answer to the charges issued against him and that the trader was deemed to have admitted the charges. The trader therefore waived his right to a hearing on the merits of the charges.

Pursuant to CBOT Rule 408.F., a BCC Panel found the trader 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 the trader to pay a $150,000 fine. The Panel also permanently suspended the trader from direct access to any trading floor owned or controlled by CME Group, from direct and indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or controlled by CME Group, and from having a business affiliation with, employment by or having a financial or beneficial interest in a Member or broker association.

The effective date of the notice is June 7, 2023.