StoneX Fined $425,000 to Settle Charge with ICE Futures U.S.

StoneX​ Financial Inc (StoneX Financial) and its affiliate StoneX Markets LLC (StoneX Markets) agreed to pay a collective penalty of $425,000 and a profit of $225,606.8 to settle with ICE​​ Futures U.S.

A subcommittee of the ICE Futures U.S. Business Conduct Committee (BBC) determined yesterday (July 20) that StoneX Financial and StoneX Markets repeatedly violated the Exchange Rule 4.04 between May 2020 and May 2021 by engaging in improper pre-hedging.

During the above period, StoneX Financial sought to fill the customer order opposite the proprietary trading desk of StoneX Markets after receiving customer orders as a broker or agency capacity. The affiliate's traders solicited and/or executed a trade to pre-hedge the risk from the impending block trade that StoneX Markets would execute opposite StoneX Financial's customer.

In addition, StoneX Financial and StoneX Markets failed to monitor the operations of their traders' block trading activities and their compliance with the Exchange' rules, possibly in violation of Exchange Rule 4.01(a). At the same time, the failure to provide the required documents, books or records to the compliance investigation team in a timely manner during the investigation may have violated Exchange Rule 21.04. StoneX Markets may have violated Exchange Rule 4.07(c) by misreporting the execution time of certain block trades and submitting them beyond the 15-minute reporting window.

StoneX Financial and StoneX Markets have not commented on the violations and agreed to pay a collective fine of $425,000 and $225,606.8 in illegal profits.

It is not the first time StoneX​ has been fined. In February, the company was fined $5,000 for violating CME rules​ regarding bunched orders. Last November, the company was also fined $60,000 by FINRA​ for procedural violations.