CME fines trader $200,000 for engaging in fraud
International derivatives marketplace CME Group has posted a notice of disciplinary action as to Zhifeng Liang.
The Chief Regulatory Officer of CME Group’s Market Regulation Department charged Zhifeng Liang with violating COMEX Rules 432.B.1., 432.B.2., 432.C., 530 and 532 based on allegations that between June 5, 2018, and February 28, 2020, Liang engaged in fraud and dishonest conduct by knowingly and willfully taking positions in the Copper futures market to offset those positions against orders he placed on behalf of his employer.
Liang took advantage of information only he was privy to about his employer’s forthcoming orders in placing these orders, resulting in a profit of $177,625 to his personal trading account.
A Hearing Panel Chair of the COMEX Business Conduct Committee (BCC) determined that Liang, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Liang therefore waived his right to a hearing on the merits of the charges. Pursuant to COMEX Rule 408.F., a BCC Panel then found Liang 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 Liang to pay a fine in the amount of $200,000, disgorge profits in the amount of $177,625, and permanently barred Liang 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.