The international derivatives market CME Group has published a notice of disciplinary action against Jatin Rasiklal Mansata.
The Chief Regulatory Officer charged Jatin Rasiklal Mansata with violating CME Rule 534 based on allegations that on one or more occasions from September 19, 2022 to September 20, 2022, Mansata entered orders in various E-Mini S&P 500 Options contracts where he knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk.
More specifically, Mansata intended to exit existing positions to avoid a margin call. Mansata recruited an employee at his business to enter orders for a fixed account partly owned by Mansata, while Mansata entered counter orders for his personal account. As the counter orders were entered for the respective accounts at the same price and either the same quantity or for orders with quantities that add up to the largest order quantity entered by Mansata, they matched and resulted in wash trades.
As a result of these transactions with his employee, Mansata benefited by increasing the available margin in his personal account and thereby avoiding a margin call on his overall pool of accounts.
A Chairman of the CME’s Business Conduct Committee (BCC) ruled that Mansata, after failing to submit a written response to the charge leveled against him, was deemed to have admitted the charge. Accordingly, Mansata waived his right to a hearing on the merits of the charge. Under Rule 408.F. of the CME, a BCC panel subsequently found Mansata guilty of committing the admitted charge and held a penalty hearing thereafter.
Based on the Panel’s records and findings and conclusions, the Panel ordered Mansata to pay a fine of $50,000 and suspended Mansata from accessing any trading venue owned or controlled by CME Group and from direct and indirect access to any specified contract market. derivatives clearing house or swap execution facility owned or controlled by CME Group for a period of five years, commencing on the effective date (March 19, 2024) and continuing for five years after full payment of the fine ordered.