The CME Group has released a disciplinary notice concerning StoneX Financial following findings of rule violations related to pre-hedging activities and supervisory failures.

The action stems from a settlement agreement in which StoneX Financial neither admitted nor denied the violations. According to the New York Mercantile Exchange (NYMEX) Business Conduct Committee, StoneX Financial facilitated improper pre-hedging on several occasions between April and August 2022, and again in April 2024.

CME Fines StoneX Financial $575K for Hedging Violations

The violations involved block trades in Crude Oil, NY Harbor ULSD, RBOB, and Platinum futures contracts. The Panel determined that after receiving a block trade solicitation, a StoneX Financial employee enabled a StoneX Group subsidiary to conduct trades on Globex in the same product and in the opposite market direction before finalizing the block trade. This pre-hedging activity allowed StoneX Financial to generate profits through referral fees tied to the executed trades.

In addition, the Panel found that StoneX Financial failed to make required representations during the block trade negotiations, specifically neglecting to disclose that it did not intend to act solely as an intermediary. The firm also fell short in supervising the employee involved, lacking adequate compliance training and oversight to ensure adherence to NYMEX regulations.

The Panel concluded that these actions violated NYMEX Rules 432.W and 526. As part of the settlement, StoneX Financial has been fined $125,000 and must disgorge $449,910 in profits earned from the pre-hedging activity.

The disciplinary action was effective on April 21, 2025.

This enforcement underscores CME Group’s commitment to maintaining transparency and fairness within its markets by holding member firms accountable for rule violations.

By penalizing the firm for facilitating pre-hedging and failing to supervise its employees adequately, the NYMEX Business Conduct Committee reinforces the importance of transparency, proper disclosure, and rigorous internal oversight in block trading practices. The settlement serves as a clear reminder to all market participants of their responsibilities in maintaining fair and orderly markets.

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