According to recent reports, it was revealed that CME Group Incorporation, an Exchange operator, fined a United States high frequency trading firm named Infinium Capital management a sum of $850,000 for a total of 3 different computer malfunctions that flustered futures markets in 2009 and 2010. Reports state in 2009, Infinium trading programs malfunctioned twice, once on October 7th and then on October 28th. This caused an uninhibited selling of e-mini contracts on the Chicago Mercantile Exchange. Furthermore, another malfunction happened on 3rd February 2010. Reports state that the company mislaid control of an algorithm that bought oil futures in fast succession on the Mercantile Exchange. On the other hand, on Friday CME charged Infinium Capital management for the damaging acts to the marketplace. Meanwhile, the February 3rd malfunction of Infinium ignited a frantic $1 rush in oil prices late that day due to the computer program that send thousands of orders per second. As a result, the firm lost million of dollars.
Meanwhile, in separate disciplinary notices, CME said that Infinium Capital management neither confessed nor starved of the rule violations. Headed by Charles Whitman, Infinium is a common household name in Chicago’s trading community. Furthermore, it is also a member of the Futures Industry Association’s Principal Traders Group. CME revealed that Infinium disobediently sold around 6,958 E-mini Nasdaq 100 Index Futures on October 28. Later, Infinium got in touch with the New York mercantile exchange to inform it about the problem. As a result prices were changed for 763 contracts. Meanwhile, on October 7th, an identical malfunction with the automated trading system occurred.
As a result of the 2 incidents, the company was fined $500,000. Additionally, the NYMEX malfunction resulted in a fine of $350,000 for the company. The Chief Operating Officer of Infinium, Greg Eickbush said that this is the biggest fine paid for a non fraudulent human mistake in the market. Adding further he said that Infinium understands the significance of keeping the marketplace as upright as possible. Lastly, he said that the company will make sure that no such problems arise in the future.
