Marex Spectron Asia Pte Ltd. agreed to pay a fine of US $135,000 to settle a disciplinary action by the New York Mercantile Exchange claiming that, between July and December 2017 as well as August and October 2018, it engaged in numerous block trades without reporting times of executions accurately as well as impermissibly disclosing counterparty and potential counterparty identities without such persons’ permission. NYMEX also claimed that, during the relevant time, the firm did not “properly advise” employees of the exchange’s guidance on block trades or supervise employees about such transactions.

Separately, a proprietary trading firm consented to a sanction of US $100,000 by the Chicago Board of Trade for sending unintended bursts of invalid, non-actionable messages on five occasions during a one-hour period on November 17, 2017, that caused the exchange to disconnect the port through which the firm was sending the messages. The messages were transmitted, said the CBOT, because of a malfunction of the firm’s automated trading system. However, observed the CBOT, when the firm became aware that its ATS had connectivity issues, it continued to reconnect the ATS without reviewing the reason for the problem.

Christopher Wielgus was fined US $20,000 in aggregate by the CBOT and Chicago Mercantile Exchange and barred from trading on any CME Group exchange for three months for trading on nonpublic information regarding block trades he was solicited to execute prior to the time he consummated such trades, from January 2014 to July 2015. Mr. Wielgus apparently executed such trades to pre-hedge the transaction; pre-hedging block-trades prior to consummation was not permitted at the relevant time. (Click here for background on CME Group’s block trades pre-hedging authorization in the article “Pre-Hedging by Principals Authorized in Block Trade Clarification Implemented by IFUS and Adopted by CME Group” in the October 30, 2016 edition of Bridging the Week.)