Edgehog to disgorge profits of $152k for violations of CBOT rules

International derivatives marketplace CME Group has posted a notice of disciplinary action as to Edgehog LLC.

Pursuant to an offer of settlement in which Edgehog LLC neither admitted nor denied the rule violations or factual findings upon which the penalty is based, a Panel of the Chicago Board of Trade (CBOT) Business Conduct Committee found that on numerous occasions from April 14, 2021, to April 30, 2021, Edgehog’s chief executive officer and an Edgehog employee, at the CEO’s direction, created and executed trades in covered User Defined Spreads (UDS) in various Soybean, Soybean Oil, Soybean Meal, Corn and Wheat futures contracts on the Globex electronic trading platform to receive beneficial over-allocations or under-allocations of futures contracts associated with the covered options instrument.

As a result of the options gaming activity, Edgehog realized profits of $151,962.

The Panel concluded that as a result of the foregoing and pursuant to Rule 433, Edgehog violated CBOT Rule 575.D.

In accordance with the settlement offer, the Panel ordered Edgehog to pay disgorgement of profits in the amount of $151,962.