CME Group has fined two hedge fund traders and suspended one of them from accessing its markets after a disciplinary panel found that they had engaged in trading practices that resulted in advantageous allocations of futures contracts.

Bernie Yu and Jeffrey Liu were the subject of disciplinary proceedings relating to activity on CME’s Globex electronic trading platform between 3 November1 and5 December, 2023.

According to CME’s findings, the traders repeatedly created and executed User Defined Spreads linked to E-mini S&P 500 options and futures. Their orders included combinations of quantities and delta levels that resulted in favourable over-allocations or under-allocations of futures contracts associated with the relevant instruments.

The activity generated $247,048.12 in profits, according to CME.

The exchange also found that Yu placed orders using the operator ID assigned to Liu.

Neither trader admitted nor denied the alleged rule violations or the factual findings as part of the settlement with CME’s Business Conduct Committee.

The panel determined that the activity breached CME Rules 575.D and 576, which cover disruptive trading practices and requirements relating to market conduct.

Under the settlement, Yu was fined $55,000 while Liu was ordered to pay $45,000. The pair were also held jointly responsible for disgorging the full $247,048.12 in trading profits.

Yu faces an additional market-access restriction. CME has suspended him for one month from access to any trading floor it owns or controls, as well as from direct or indirect access to CME-controlled designated contract markets, derivatives clearing organisations and swap execution facilities.

The suspension runs to 28 September, 2026.