Once again, the CME has fined a company and a trader for wash trades. The trades were between two accounts with the same beneficial owner and, the CME notes, were designed to delta hedge OTC options. So - the intent to actually do the trades is fairly easy to find. But so is are the trades.
The company, in this case a bank, gets all its transactions. It knows its accounts and beneficial owners. How hard is it to set up a simple match (mind you, on a large scale, it is still a lot of data to go through) that says look at all trades. Compare whether the buy and sell side of the same transaction are in our executions. Compare the accounts - do they have the same beneficial owner? If yes, possible wash trade. There is additional data in the exchange data feed that can let you scrub out trades where there is the same account or accounts with the same beneficial owner as allowable. Yes, there are trades where the same account is matched on both sides of the transaction that are allowed under exchange rules. Failing to understand the allowable filters and the data needed to operate those filters and how to get the data and store it is one of the primary reasons for massive false positive issues. But that is a discussion for another day.
But just having done that would have avoided the disciplinary impacts. The company was fined $40K for "failure to supervise" and, more importantly, is probably on the exchange radar as not doing a thorough job of compliance oversight - meaning the exchange has to look closer at future issues since the company compliance is not seen as reliable. In addition, the trader was fined $10K and suspended from the access to the exchange for 5 days. That is 5 days someone else has to manage that person's book - and most desks don't have spare people just lying around.
So, understanding what is easy and what is hard and where the risks are is a central component to effective compliance. It is just the cost of entry to trading in today's electronic markets. Don't treat it as an incidental cost of doing business and end up with even great issues.
The notice for the company is here and the trader here