CME suspends trader for nine months for engaging in disruptive practices

International derivatives marketplace CME Group has published a notice of disciplinary action against Adam Cobb-Webb.

Pursuant to an offer of settlement in which Adam Cobb-Webb neither admitted nor denied the rule violations or factual allegations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee found that from December 2021, through January 2022, Cobb-Webb entered orders in the February 2022 Crude Oil futures markets with the intent, at the time of order entry, to cancel those orders before execution and to mislead other market participants.

Specifically, the Panel found that on multiple occasions during that same period, Cobb-Webb layered multiple orders on one side of the market opposite his existing orders that rested on the other side of the market. After the existing passive orders traded, Cobb-Webb canceled the layered orders. By layering and cancelling orders without the intent to trade, Cobb-Webb sent false signals of supply and demand to the marketplace.

The Panel further found that as a result of this disruptive trading activity during the relevant timeframe, Cobb-Webb realized a financial benefit of $191,670.

The Panel also found that from May 2021, through January 2022, Cobb-Webb knowingly placed or accepted buy and sell orders in the same product and expiration month, 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, in various Crude Oil futures markets.

The Panel found that, as a result, Cobb-Webb violated NYMEX Rules 575.A. 575.B., and 534.

In accordance with the settlement offer, the Panel ordered Cobb-Webb to pay a fine in the amount of $75,000, disgorge the monetary benefit in the amount of $191,670, and serve a nine-month suspension from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.

The suspension will run from trade date February 16, 2024, through November 16, 2024.