This week the CME issued seven Notices of Disciplinary Action involving pre-arranged trading, layering and spoofing, and failing to cooperate in an exchange investigation. The cases, several of which were connected, related to trading on the COMEX and NYMEX venues. All seven cases involved energy and commodity trading. While not entirely out of character for the Chicago-based exchange group, firms active on these venues can learn from such cases to sharpen their internal transaction surveillance and trade compliance processes.
The first three cases are related and saw three retail traders from South Korea penalised for pre-arranged trading in gold options in violation of Rule 539.A (Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited) on COMEX. Two of the traders also failed to appear at a scheduled interview with CME staff in violation of Rule 432.L.1 (General Offenses) - click here, here and here to view the cases. Between 30 August and 03 September 2024, the traders executed a series of prearranged trades in various gold options contracts opposite one of the other two traders.
Specifically, one of the traders would enter buy (sell) orders that bettered the market before the other trader entered aggressive sell (buy) orders seconds later. The traders entered these orders for the purpose of trading opposite one of the other traders without interference from other market participants. In the first two cases, the goal was to close out an existing position for the respective trader (the third trader, Sea Lee, only supported the other two traders to close their positions). In addition, the traders in the first two cases failed to appear at scheduled staff interviews in June 2025 (the third trader, Sea Lee, apparently did attend her interview). The first and second traders were each fined USD $50,000 and were permanently suspended from direct access to any trading floor owned or controlled by CME Group. The third trader, Sea Lee, was also fined USD $50,000 and ordered to pay USD $760 in disgorgement but was only suspended from the CME for one year.
The fourth and fifth cases are related and saw a Hong Kong-based asset manager and retail trader penalised for failing to appear at scheduled interviews with CME staff in violation of Rule 432.L.1 (General Offenses) for offences related to activity on NYMEX - click here and here to view the cases. The two failed to appear at scheduled staff interviews in May and September 2025 respectively in connection with a money pass trading investigation involving various Crude Oil Weekly options.
No further details are provided nor is the connection between the asset manager and the retail trader elaborated upon (the cases do however share the same file number). Both traders were fined USD $50,000 each and were permanently suspended from direct access to any trading floor owned or controlled by CME Group.
The sixth and seventh cases relate to the same institutional trader located in Hong Kong (the institution is not named) for engaging in layering and spoofing in various contracts in violation of Rule 575.A and 575.B (Disruptive Practices Prohibited) on the NYMEX and COMEX venues - click here and here to view the cases. Between 30 July 2024 and 03 January 2025, the trader entered orders in various crude, natural gas, palladium, platinum, copper, gold and silver futures with the intent, at the time of order entry, to cancel those orders before execution or to modify the orders to avoid execution. In the CME’s estimation, the trader also intended to mislead other market participants.
Specifically, the trader repeated a pattern in which she layered orders for a large quantity on the bid (offer) followed by layering orders for a smaller quantity on the offer (bid). Once her small-quantity orders traded in the market, she cancelled her large-quantity orders. She also engaged in a pattern in which she cancelled her large-quantity orders prior to receiving a fill on her small-quantity orders. As a result of these rule violations, the trader received a monetary benefit of USD $14,540. The trader was fined a total of USD $120,000 (NYMEX - USD $60,000, COMEX - USD $60,000) and was ordered to disgorge profits amounting to USD $14,540. She was also suspended from accessing any trading floor owned or controlled by the CME Group for five years. The suspension will only begin on the effective date of the CME’s decision and will continue for five years from the date that the fine and disgorgement are paid in full.