CME Disciplines Floor Traders For Improper Deals
August 01 2011 - 5:19PM
Dow Jones News
CME Group Inc. (CME) disciplined 15 floor traders for improper
trading in gold and silver options between October and December of
2008.
The deals were done at the heart of the global financial crisis,
when gold prices tumbled 20% before recouping their losses, while
silver sank 28% and struggled to shake off its declines.
The violations included withholding client orders from the
market to benefit other traders or personal accounts, pre-arranged
trades and other improper dealings, according to notices by CME
Group, which operates the Comex division of the New York Mercantile
Exchange.
While the citations were issued as separate orders, groups of
specific violations fell on the same date.
CME Group declined to comment.
The traders' profits ranged from a few hundred dollars to
several thousand and came at the expense of client orders,
according to the CME notices.
CME said in the notices that the traders agreed to settle the
charges without admitting or denying the violations. CME said it
ordered the traders to relinquish their gains, with two traders
directed to pay restitution to their clients.
In addition, CME levied fines on some, but not all, of the 15
traders. The fines totaled about $335,000, according to the
notices.
The trading privileges of the 15 traders were suspended for
various lengths of time, the notices said.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095;
tatyana.shumsky@dowjones.com
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