On Feb. 24, MGEX fined E D & F Man $25k for use of wash trades.
- E D & F Man Capital Markets were charged for conducting internal exercises and
assignments on Hard Red Spring Wheat options that were not reported to MGEX.
- Breach rule 2.1.6 supervision, 743.00 prohibition on accommodation/wash trade.
- Thus, MGEX did not formally exercise in-the-money options nor assign the notice of intent to the proper clearing member in accordance with expiration procedures.
- ED&F entered offsetting orders for buying and sales same month, of same HRSW
futures, for customers with same beneficial ownership, resulting in wash trades.
- The settlement terms were accepted in satisfaction of the charges with $25k fine.