CME Group Permanently Bars Three Traders for Exchange Violations

  • One trader barred for alleged spoofing on NYMEX, COMEX
  • Traders all fined for alleged rule breaking at exchanges

CME Group Inc., owner of the world’s largest futures market, permanently barred three people from trading on its platforms, accusing them of rules violations, including a form of market manipulation known as spoofing.

Nitin Gupta was fined a total of $150,000 by the CME’s New York Mercantile Exchange and the Commodity Exchange for allegedly entering large orders for gold, silver, copper and crude oil futures without the intent to trade, according to disciplinary notices released on Monday by the Chicago-based CME.

Gupta allegedly entered the orders to encourage others to trade opposite his smaller orders, CME said. After having the smaller orders filled, he allegedly canceled the large orders. Gupta failed to answer the charges against him and was “deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges,” according to one disciplinary notice.

Spoofing is banned because it can trick other traders into thinking prices are poised to move, prompting them into nudging prices in the direction the cheater prefers.

Libin Zhou was barred from trading on CME exchanges, fined $100,000 and ordered to pay restitution of $24,580 for alleged trading that ended up transferring $24,580 from his employer’s account to his personal account, according to the CME’s disciplinary action. An order was also entered finding that Zhou failed to answer the charges against him, according to the notice.

Rajasekaran Veeramuthu was barred from trading and ordered to pay $50,000 for alleged so-called wash trades in silver options in which he and another trader at the same firm executed trades between accounts with the same beneficial owner. Veeramuthu was also found to have not answered the charges against him, according to a disciplinary notice.

The recipients of the disciplinary actions couldn’t be immediately reached. CME didn’t provide contact details for them or their representatives.

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