Nadex bans three members from trading over their failure to cooperate with Compliance Department
Catalin Pasnicu, XueYu Chen, and Hang Zhang have had their Nadex membership revoked, and have been permanently banned from trading on the Nadex markets by any means.
North American Derivatives Exchange (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has taken disciplinary action against three of its members – Catalin Pasnicu, XueYu Chen, and Hang Zhang, over their violation of Nadex Rule 3.3, which concerns member obligations.
Nadex Rule 3.3(a) states:
“Each Member and any Authorized Trader(s) thereof, must comply with these Rules, applicable provisions of the Commodity Exchange Act, and relevant Commission regulations. Each Member and any Authorized Trader(s) thereof must also cooperate promptly and fully with Nadex, its agents, and/or the Commission in any investigation, call for information, inquiry, audit, examination, or proceeding. Such cooperation shall include providing Nadex with access to information on the activities of such Member and/or Authorized Trader in any referenced market that provides the underlying prices for any Nadex market…”
Concerning the action against Catalin Pasnicu, Nadex explains that, in October and November of 2017, the Compliance Department contacted Mr. Pasnicu on multiple occasions, requesting that he provide information regarding certain order and trade activity occurring in his account in October 2017. Mr. Pasnicu repeatedly failed to respond to pertinent inquiries and refused to produce material information related to his trading activity at Nadex and elsewhere. Based on Nadex’s investigation, the Compliance Department concluded that Mr. Pasnicu violated Nadex Rule 3.3(a) when he failed to fully respond to, and/or cooperate with, the Compliance Department’s requests for information relative to these inquiries.
Regarding XueYu Chen, Nadex explains that, in October and November of 2017, the Compliance Department contacted Ms. Chen on multiple occasions, requesting that she provide information regarding certain deposit activity occurring in her bank account in October 2017 relevant to a pending investigation. Ms. Chen refused to produce material information related to this deposit history. Based on Nadex’s investigation, the Compliance Department concluded that Ms. Chen violated Nadex Rule 3.3(a) when she failed to fully respond to, and/or cooperate with, the Compliance Department’s requests for information relative to these inquiries.
In the case of Hang Zhang, inOctober and November of 2017, the Compliance Department contacted him on multiple occasions, requesting that he provide information regarding certain deposit activity occurring in his bank account in October 2017 relevant to a pending investigation. Mr. Zhang refused to produce material information related to this deposit history. Based on Nadex’s investigation, the Compliance Department concluded that Mr. Zhang violated Nadex Rule 3.3(a) when he failed to fully respond to, and/or cooperate with, the Compliance Department’s requests for information relative to these inquiries.
As a result of their non-compliance with Nadex Rule 3.3(a), and their failure to cooperate with the Nadex Compliance Department, the three members have had their membership revoked and they have been permanently banned from trading on the Nadex markets by any means. In addition, Mr Zhang and Ms. Chen have each been fined $250, whereas Mr. Pasnicu has been fined $750.
In October this year, Nadex took a disciplinary action against Carlos Evertsz – one of its members, over his failure to comply with Exchange Rules 3.3 and 5.19, so his membership has been revoked.
Evertsz was the subject of two Financial Industry Regulatory Authority (FINRA) matters, both of which resulted in trading suspensions. He had been barred from affiliation with any FINRA member in any capacity. Evertsz was also found to have been party to a customer compliant filed in 2017 alleging claims of unsuitability and to be party to a second customer complaint, also filed in 2017, alleging breach of fiduciary duty.
However, Evertsz failed to disclose the incidents on his April 2018 application. He also failed to inform the Exchange of these incidents after becoming a Member.
