International derivatives marketplace CME Group has issued a disciplinary notice against Michael Cohen, a pit broker based in Chicago, following findings by a Panel of the Chicago Mercantile Exchange (CME) Business Conduct Committee. The action arises from Cohen’s handling of a trade in the SOFR options on futures open outcry market on June 7, 2024.
The Panel acted pursuant to an offer of settlement in which Cohen neither admitted nor denied the rule violations or the factual findings on which the penalty is based. After reviewing the matter, the Panel determined that Cohen prearranged and noncompetitively executed a SOFR options trade without bidding or offering his orders in a manner consistent with open and competitive trading practices.
Findings of Rule Violations
According to the Panel, Cohen received opposing buy and sell orders and, together with another broker in his broker association, executed the trade without openly and competitively bidding or offering the orders in the open outcry pit. This conduct was deemed inconsistent with the competitive auction environment required on the trading floor.
In addition, the Panel found that Cohen executed the trade at a non-integer tick price that was not explicitly defined in CME Rule 542. Specifically, the trade was executed at an unsanctioned quarter-tick price. Cohen then recorded the trade in a way that achieved the quarter-tick price without offering the specific legs and prices to the open outcry pit.
Based on these findings, the Panel concluded that Cohen violated CME Rules 521, 539.A., and 542.
Sanctions Imposed
In accordance with the terms of the settlement offer, the Panel ordered Michael Cohen to pay a fine of $10,000. The disciplinary action also includes a suspension affecting his access to CME Group trading venues.
Cohen is suspended from access to any trading floor owned or controlled by CME Group, as well as from direct and indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or controlled by CME Group. The suspension is for 15 business days, beginning on trade date June 29, 2026, and continuing through and including trade date July 20, 2026.
The notice underscores CME Group’s enforcement of its rules governing competitive trading, trade execution practices, and permitted pricing increments in its open outcry markets.
