CME Business Conduct Committee issues 20 Disciplinary Action Notices

The CME Business Conduct Committee has continued where it left off in late 2022 and early 2023 by issuing a batch of 20 enforcement notices (see here) for a range of rule violations on the COMEX and CME platforms. All of the enforcement notices evidently apply to private individuals as no companies are named. As was the case in the previous bulk drop of such notices, the same individuals are named in separate notices for rule violations on each of the two CME platforms.

The main market activity penalised in this case was Pre-arranged Trading with very similar descriptions between the cases although it is not clear whether the named individuals were the ones colluding, although this seems likely. There were also several cases of Wash Trading where mention is made of the use, by the accused, of the automated trading system (ATS). Not much more detail was provided.

 RegTrail Insight

The most notable aspect of this batch of cases was again the failure of the accused to respond to information requests from the exchange and/or failing to appear at a disciplinary hearing, earning the offenders either short-term or permanent bans from trading. 

While most energy and commodity trading firms are likely to have robust processes and controls in place to respond promptly for such requests for information from the exchange, this serves as a reminder to Compliance of the importance of following through with such. Front Office should also be placed on high alert for any activity that might be construed as Pre-arranged Trading given the clear focus by the respective CME surveillance teams on this behaviour at present.