International derivatives marketplace CME Group has published a notice of disciplinary action against Jatin Rasiklal Mansata.
The Chief Regulatory Officer has issued charges against Jatin Rasiklal Mansata for 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 the purpose of the orders was to avoid taking a bona fide market position exposed to market risk.
More specifically, Mansata intended to exit the existing positions to avoid a margin call. Mansata enlisted an employee at his firm to enter orders for a firm account that Mansata partially owned, while Mansata entered opposing orders for his personal account. As the opposing orders were entered for the respective accounts at the same price and either the same quantity or for orders with quantities that summed to the larger order quantity entered by Mansata, they matched and resulted in wash trades.
As a result of these trades with his employee, Mansata benefitted by increasing the available margin in his personal account and thereby avoiding a margin call to his overall group of accounts.
A Hearing Panel Chair of the CME Business Conduct Committee (BCC) determined that Mansata, having failed to submit a written answer to the charge issued against him, was deemed to have admitted the charge. Mansata therefore waived his right to a hearing on the merits of the charge. Pursuant to CME Rule 408.F., a BCC Panel then found Mansata guilty of committing the admitted charge and held a penalty hearing thereafter.
Based on the record and the Panel’s findings and conclusions, the Panel ordered that Mansata pay a fine in the amount of $50,000 and suspended Mansata’s 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 for a period of five years, beginning on the effective date (March 19, 2024) and continuing for five years after the ordered fine is paid in full.
