CME fines trader for using prohibited trading strategy
International derivatives marketplace CME Group has posted a notice of disciplinary action against Jayaraj Perumalswamy.
Pursuant to an offer of settlement in which Jayaraj Perumalswamy neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, a Panel of the CME Business Conduct Committee found that between June 1, 2021, and October 7, 2021, Perumalswamy operated two automated trading systems (ATS) wherein the aggressive strategy entered orders in NASDAQ E-Mini and Micro E-Mini futures that traded opposite resting orders the second ATS previously entered.
Perumalswamy knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk.
The Panel found that as a result of the foregoing, Perumalswamy violated CME Rule 534.
In accordance with the settlement offer, the Panel ordered Perumalswamy to pay a $15,000 fine and to serve a 15-business-day trading 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 from trade date October 13, 2023 through, and including, trade date November 2, 2023.