One of the areas DCM has addressed multiple times this year (and last year) is the exchanges increasing trend towards imposing "failure to supervise" fines on the companies where traders have improper behavior. Mitsubishi RTM (the metals trading side - not the oil side) was just fined $250,000 for "failure to supervise". The disciplinary notice had a couple items that you don't always see but that we stress in our review of training programs:
1. The company "failed to properly train one of its traders, a secondee (“Trader A”), who had no prior trading experience, before placing Trader A into a temporary trading rotation to trade futures on NYMEX".
"ailed to provide sufficient training specific to trading CME Group markets, or CME Group trading rules, including disruptive trading, to Trader A. As a result, Trader A attempted to trade through experimentation, resulting in executing disruptive trades that violated Exchange rules."
"The Panel concluded that, pursuant to Exchange Rule 433, (it) was strictly liable for the acts of its employee whose conduct the Panel concluded violated Exchange Rule 575.A."
The trading appears to have been basic spoofing or disruptive trading but the fine indicates the exchange's displeasure with the lack of training. This should be a blueprint for new shops entering US markets or expanding organizations. The CME notice is here
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