International derivatives market CME Group has published a notice of disciplinary action against Budo Trading LLC.
According to a settlement offer in which Budo neither admitted nor denied the rule violations or the factual findings underlying the penalty, on June 26, 2024, a panel of the Chicago Mercantile Exchange’s Business Conduct Committee found that since at least Nov. 14 , 2022, through February 28, 2023, Budo entered multiple opposing buy and sell orders, both manually and using an automated trading system, for the same account in various Micro Bitcoin and Micro Ether futures contracts that matched against each other on a more than random basis.
Despite being notified on numerous occasions that it had executed numerous self-matches, Budo relied on false information that self-match prevention had been activated by the clearinghouse without adequately investigating and monitoring self-match activity. Budo’s failures to use functionality to minimize the possibility of self-matching commands resulted in Budo performing further self-matches.
The panel found that Budo reasonably should have known that entering orders in this manner would have a washing effect.
Therefore, the panel concluded that Budo violated CME Rules 432.W. and 534.
Under the settlement offer, the commission ordered Budo to pay a $50,000 fine. The notice is effective on June 28, 2024.