CFTC Orders Taiwanese Firm to Pay $200,000 for Wash Sales

WASHINGTON, D.C.- The Commodity Futures Trading Commission today issued an order filing and settling charges against Taishin Securities Co., Ltd., a Taiwanese financial services company, for engaging in wash sales and non-competitive transactions on the Chicago Mercantile Exchange.

The order requires Taishin to pay a civil monetary penalty of $200,000 and to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged.

Case Background

According to the order, Taishin engaged in multiple wash sales and non-competitive transactions while moving open futures positions it held from one broker to another broker.

Specifically, the order finds that in or around October 2022, a Taishin trader reached internal trading limits with the first broker and decided to transfer futures positions to Taishin's account at the second broker. To make this transfer, the trader placed offsetting orders for the purchase and sale of the same delivery month of the same futures contract at the same price on the Chicago Mercantile Exchange with the intent that some or all of those orders would offset, knowing that the timing and structure of those orders would minimize market competition. In so doing, Taishin negated the risk or price competition incidental to an open and competitive marketplace. In total, the trader executed 50 wash trades between October and December 2022 encompassing 175 contracts with a value of approximately $17 million.

The Division of Enforcement staff responsible for this action are Steven Kim, Kara Mucha, Daniel Jordan, and Rick Glaser.