An international derivatives marketplace has recently taken disciplinary action against a consulting firm based in Chicagoland. This action arises from a settlement offer where the firm, identified as a Revenue Sharing Association, did not admit to nor deny the violations alleged against them.
The investigation revealed that on several occasions between late January and late June 2021, brokers working for the firm altered the broker of record after a trade was executed within the Eurodollar options pit. The intent behind these changes was to circumvent the limitations imposed by Exchange Rule 515.E, which restricts the percentage of personal trading volume that members of a broker association can conduct with one another.
During this period, it was determined that the firm did not adequately supervise its brokers. Furthermore, the firm failed to register correctly as a single broker association in relation to their floor brokerage activities within the same timeframe.
Consequently, the findings concluded that the firm had violated specific CME rules, including Rules 432.W. and 515.B.6. As a result of these violations, a financial penalty of $75,000 has been imposed on the consulting firm.
The effective date for this disciplinary measure is set for October 8, 2025.