CBOT Fines Proprietary Trading Firm Over Disruptive Pre-Open Activity

​The Chicago Board of Trade (CBOT) has imposed a $95,000 fine on proprietary trading firm Hertshten Group Limited following findings of disruptive conduct during pre-open trading sessions, according to a disciplinary settlement.

Under the agreement, the firm “neither admitted nor denied” the alleged rule violations. Of the total penalty, $55,000 will be allocated directly to CBOT.

Messaging Activity Triggered Market Safeguards

CBOT’s Business Conduct Committee determined that Hertshten Group, together with analysts at its India-based subsidiary, engaged in repeated messaging behavior described as “looping.” Regulators said the activity affected opening prices in the 30-Day Federal Funds futures market and triggered automated circuit breakers.

The committee stated that the firm failed to adequately supervise its agents or prevent conduct deemed disruptive to market operations, concluding that the actions violated CBOT rules related to supervision and market integrity. Intervention from the Global Command Center operated by CME Group was required to stabilize trading conditions.

Separate CME Enforcement Against Prop Firm

The case follows a separate enforcement action by CME Group involving institutional proprietary trader Tanius Technology, which was fined $150,000. Regulators found that between 2020 and 2022 the firm entered oversized Treasury futures orders it could not immediately cover, stacking maximum-quantity orders during roll periods to benefit from pro-rata matching mechanics.

Institutional proprietary trading firms such as Hertshten Group and Tanius trade using their own capital and fall under CME market conduct rules, unlike retail-focused funding platforms such as FTMO and FundedNext.

Although both matters fall under CME Group oversight, Hertshten’s case was handled specifically at the CBOT committee level, while the Tanius enforcement was conducted across CME Group’s broader regulatory framework.

Operational Disruption Adds Context

The disciplinary action comes amid recent operational challenges at CME. The exchange operator’s CME Globex system experienced a multi-hour outage on Thursday, disrupting trading in futures tied to gold, copper, and natural gas.

The outage triggered automated trading halts and required intervention from CME’s Global Command Center, underscoring the exchange’s role in maintaining orderly markets and supporting price discovery during periods of disruption.

Separately, CME has announced plans to expand product offerings, including single-stock futures tied to more than 50 major U.S. companies such as Nvidia and Tesla, reflecting continued development across its derivatives markets.