International derivatives marketplace CME Group has posted a notice of disciplinary action against Spartak Trading LLC, a proprietary trading firm located in the United States.

Pursuant to an offer of settlement in which Spartak neither admitted nor denied the rule violations or factual findings upon which the penalty is based, a Panel of the Chicago Board of Trade (CBOT) Business Conduct Committee found on August 27, 2024, an automated trading system (ATS) operated by Spartak utilized an auto-hedger parameter that was set to an inappropriate value during the Treasury futures roll period in the September 2024-December 2024 10-Year Futures Spreads.

During this time a large fill event occurred in the market and the hedging system erroneously determined that the entire first book level had traded in full. Therefore, due to this faulty parameter setting, the hedging system entered large aggressor orders and created a hedge for a position that it did not actually hold.

Within seconds, a Spartak trader aggressively sold contracts at the same price to offset the position the hedging system created. Spartak’s trades resulted in a significant decline in liquidity in both the 10-Year and the 5-Year Futures Spreads, volume aberrations for a roll period at the close of the trading day, and significant latencies in the match engine and market data. Spartak failed to diligently supervise the trading activity of its automated trading system.

As a result of the foregoing, the Panel concluded that Spartak violated CBOT Rules 432.W. and 432.Q.

Additionally, the Panel found that between August 2024 and May 2025, Spartak employed a strategy in markets subject to a pro-rata matching algorithm where it entered multiple maximum quantity orders in an effort to achieve a greater proportion of passive fills.

At times during the Treasury futures roll periods, Spartak had a significant count of these maximum quantity orders resting at the first price levels in the 5-Year and 10-Year spread order books. While unlikely to have occurred, the immediate execution of all of Spartak’s orders on one side of the market in either of these products could have required a margin payment, if called at that moment, that would have exceeded Spartak’s immediately available, liquid, unencumbered assets.

As a result of its conduct, Spartak received a disproportionate number of fills relative to its ability to take immediate fills on its resting orders, thus having the potential to impact other passive participants in these markets.

As a result of the foregoing, the Panel concluded that Spartak violated CBOT Rules 432.B.2.and 432.Q.

In accordance with the settlement offer, the Panel ordered Spartak Trading LLC to pay a fine of $80,000.