A recent disciplinary action has been taken against a trader for engaging in improper trading practices in a derivatives market. The trader, after a settlement offer, did not admit or deny any rule violations, but was found responsible for actions that misled others in the market.
The violations occurred on two specific dates in April and May 2023. The trader entered several orders in the Henry Hub Natural Gas Financial Calendar Spread Option markets with the intention to cancel those orders prior to execution, thereby misleading another market participant. The investigation revealed that while in discussions to negotiate a block trade through a broker, the trader placed non-genuine orders at enhanced prices to secure a more favorable rate for the block trade. When the counterparty adjusted their price closer to the trader’s previous order on the exchange, the trader capitalized on this by executing the block trade and subsequently canceled their original orders on the trading platform.
Due to the disruptive nature of these trading activities, the counterparty suffered financial losses totaling $40,000. In light of these findings, the trader was found to have violated specific trading rules.
As a result of the investigation and subsequent rulings, the trader was penalized with a $60,000 fine and ordered to pay restitution of $40,000. Additionally, the trader faced a suspension of 20 business days from participating in any trading activities on the floors operated by the marketplace, which commenced on January 24, 2025, and will conclude on February 21, 2025.
This action serves as a reminder of the commitment to maintaining integrity and fair practices within the trading environment. The measures taken reflect the importance of upholding rules designed to protect the interests of all participants in the market and ensure a level playing field.