Chicago, IL – The Commodity Futures Trading Commission (CFTC) has penalized Taishin Securities Co., Ltd., a Taiwanese financial services firm, $200,000 for engaging in manipulative trading practices on the Chicago Mercantile Exchange (CME). The settlement, announced October 1, 2024, includes a cease and desist order preventing further violations of the Commodity Exchange Act and CFTC regulations.
The CFTC’s investigation revealed that Taishin executed multiple “wash sales” and non-competitive transactions between October and December 2022. These actions occurred as the company sought to transfer open futures positions from one brokerage account to another.
According to the CFTC order, a Taishin trader, facing internal trading limits with their initial broker, attempted to move positions to a second brokerage account. To facilitate this transfer, the trader placed offsetting buy and sell orders for identical futures contracts – same delivery month, same price – on the CME. The intent, the CFTC alleges, was to create the appearance of legitimate trading activity while minimizing genuine market competition. These offsetting orders were designed to cancel each other out, effectively negating any price discovery that would normally occur in an open market.
The firm executed 50 wash trades totaling 175 contracts, representing a value of approximately $17 million. The CFTC determined that these actions were specifically designed to circumvent the natural price competition expected in a fair and open marketplace.
The case was led by CFTC Enforcement Division staff members Steven Kim, Kara Mucha, Daniel Jordan, and Rick Glaser. The settlement underscores the CFTC’s commitment to policing manipulative trading practices and maintaining the integrity of U.S. commodity markets.
Source: CFTC.gov
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