Nadex Took a Disciplinary Action Against one of its Members

North American Derivatives Exchange (Nadex), a part of IG Group, has published a disciplinary notice about the decision of violating its membership rules. The disciplinary notice is effective immediately.

Nadex announced that one of its members - Xie Wang has violated a number of its rules.

Nadex stated that each member and any authorized trader(s) must comply with its rules, applicable provisions of the Commodity Exchange Act, and relevant Commission regulations. Each member and any authorized trader(s) 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 any authorized trader(s) in any referenced market that provides the underlying prices for any Nadex market.

According to the information showed on the report, on October 11, 2019, the Compliance Department sent Wang an Account Inquiry letter requesting, among other things, general background information, copies of relevant bank statements, source of funds information, and details regarding his order and trading activity. Wang responded to certain inquiries and requests for information.

However, despite several extensions provided for deadlines to respond to subsequent inquiries, Wang failed to fully cooperate with Nadex Compliance's inquiry. Specifically, Wang failed to adequately respond to requests for further information regarding individuals and related activity identified on his bank statements.

Further, during the course of this investigation, Wang provided misleading information to the Compliance Department relative to his connections with other Nadex Members and his past trading experiences at multiple trading venues. Finally, Wang failed to notify Nadex in writing that his trading privileges had been suspended at another trading venue prior to or during this investigation.

Based on Nadex's investigation, the Compliance Department concluded that Wang violated Exchange Rule 3.3(d)(i) when he failed to immediately notify Nadex in writing that his trading privileges had been suspended at another trading venue. The Compliance Department has also concluded that Wang violated Member Acknowledgements and Authorizations, Section (h) of the Nadex Membership Agreement and Exchange Rule 3.3(a) by failing to fully cooperate with this investigation. Additionally, Wang violated Exchange Rule 5.19(k) when he provided false and/or incomplete information related to his connections with other Nadex Members, and his past trading experience at other trading venues.

As a result of the aforementioned violations, Xie Wang has been issued with a $3,500 fine. In addition, Wang's Nadex Membership has been revoked, his account terminated, and he has been permanently banned from trading on Nadex markets, either directly for his own account, through an intermediary, or as an authorized trader on behalf of any other account.