CME fines edge fund traders over disruptive trading
CME Group has fined two hedge fund traders and suspended one of them from accessing its markets after a disciplinary panel found that they had engaged in trading practices that resulted in advantageous allocations of futures contracts.
CME Group has imposed fines and suspension on two hedge fund traders, Bernie Yu and Jeffrey Liu, following a disciplinary panel's finding of disruptive trading practices. The trades, conducted between November 3 and December 5, 2023, on CME's Globex electronic trading platform, involved repeated creation and execution of User Defined Spreads related to E-mini S&P 500 options and futures.
These orders, which included specific quantities and delta levels, led to advantageous allocations of futures contracts, generating $247,048.12 in profits for the traders. Both traders, who neither admitted nor denied the violations, were fined $55,000 and $45,000 respectively, and were ordered to disgorge the full $247,048.12 in trading profits.
Additionally, Yu faces a one-month suspension from all CME-owned or controlled trading floors, designated contract markets, derivatives clearing organizations, and swap execution facilities, effective until September 28, 2026.
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