CFTC Fines Shinhan Securities $212,500 for Wash Sales on NYMEX

The Commodity Futures Trading Commission (CFTC) announced that it has issued an order filing and settling charges against financial services firm Shinhan Securities Co. Ltd. for engaging in wash sales and non-competitive transactions on the New York Mercantile Exchange (NYMEX). Under the terms of the settlement order, Shinhan Securities is required to pay a civil monetary penalty of $212,500. The firm must also cease and desist from committing further violations of the Commodity Exchange Act (CEA) and associated CFTC regulations. According to the regulatory findings, a trader entered near-simultaneous bids and offers for identical quantities of the same futures contract across trading accounts sharing the same beneficial owner. The strategy was designed to enhance the probability that buy and sell orders would execute at identical or similar prices, effectively offsetting the trades upon execution. By executing these offsetting transactions, Shinhan Securities eliminated the market risk and price competition inherent to an open, competitive marketplace. The enforcement action was handled by CFTC Division of Enforcement staff members Daniel Jordan, Aboagye Agyapong, Jordon Grimm, and Paul Hayeck.