Nadex bans member for prearranging trades
North American Derivatives Exchange (Nadex), a part of IG Group (LON:IGG), has issued a notice of disciplinary action against one of its members – Jovanie Ruddock.
Nadex has revoked the membership of Mr Ruddock and has imposed a fine on him for providing misleading information regarding his relationship to another Nadex Member and for prearranging trades.
On June 13, 2019, in light of potentially coordinated trading activity, the Compliance Department sent Mr Ruddock an Account Inquiry letter requesting, among other things, information regarding his relationship with another Nadex Member, source of funding, and understanding of Nadex rules. Ruddock responded to certain inquiries and requests for information.
However, he failed to produce full and complete information regarding his trading strategy, timing and placement of orders, as well as his interactions with other Nadex Members while conducting order and trade activity on the Exchange.
Nadex Compliance opened an investigation on September 26, 2019 due to Ruddock providing misleading and inaccurate information to Nadex regarding his connection with another Nadex Member and his coordination in trading with this participant. Specifically, upon review of the trading activity in Ruddock’s account, and based on a preponderance of the evidence, he engaged in a series of at least seven prearranged trades with another Nadex Member from September 2017 through June 2019.
Based on Nadex’s investigation, the Compliance Department concluded that Ruddock violated Exchange Rule 5.19(k) when he impeded the progress of an investigation by providing misleading information regarding his relationship to another Nadex Member. The Compliance Department has also concluded that Ruddock violated Exchange Rule 5.19(b) when he prearranged trades with another Nadex Member for the purpose of circumventing exposure of his orders to open and competitive bidding in the market.
In addition, Nadex’s Compliance Department has determined that Mr Ruddock violated Member Acknowledgements and Authorizations, Section (h) of the of Nadex Membership Agreement and Exchange Rule 3.3(a) when he failed to fully cooperate with Nadex’s investigation, in his failure to respond in full to all requests for information.
Due to these findings, Jovanie Ruddock has been assessed a $2,000 fine. Additionally, Jovanie Ruddock’s Nadex Membership has been revoked, his account terminated, and he has been permanently banned from trading on Nadex markets, either directly for his own account, through an intermediary, or as an authorized trader on behalf of any other account.