The Chicago Mercantile Exchange settled disciplinary actions against two individuals – Hicham Boularbah and Hamza Slaoui, brokers at an unnamed non-US firm – for acting on nonpublic order information from a customer without the customer’s consent to direct a broker at R.J. O’Brien & Associates, their United States clearing firm, to execute trades on Globex in Euro FX options strategies on various dates in June 2016. The individuals then used the average prices of the fills to price block trades for their customer and allowed their non-US firm to “secure a portion of riskless profit.” After being contacted by CME, the individuals’ firm returned the relevant profits. Mr. Boularbah agreed to resolve his disciplinary action by paying a fine of US $60,000, while Mr. Slaoui consented to pay a penalty of US $40,000. Both individuals also agreed to serve a one-month all CME Group exchanges’ access prohibition. Relatedly, RJO agreed to pay a fine of US $80,000 and disgorge profits of US $110,050 for pre-hedging a block trade prior to consummation of the transaction and for not reporting two block trades within times required by CME.
Unrelatedly, Marex Financial Limited agreed to pay a fine of US $50,000 to ICE Futures U.S. for transmitting electronic orders to the exchange on behalf of a non-US futures broker without including the unique IDs assigned to the registered operators. Apparently, this was caused by a software error that caused the overriding of all unique IDs assigned to traders at the non-US futures broker with a single non-unique ID. IFUS acknowledged that Marex identified and fixed the software glitch after being advised by the exchange.
Additionally, Mark Lindop consented to pay a fine of US $50,000 and serve a one-week access suspension at IFUS for entering orders without the intent to execute them on various occasion during January 2017, April 2017, March 2019 and May 2019. Mr. Lindop allegedly entered and cancelled orders during pre-open periods of various markets to determine market depth and the effect the orders might have on the indicative opening price.