In a stunning move, ICE Futures U.S. has issued a disciplinary notice against Victor Baudillon, a trader accused of orchestrating a series of coordinated schemes designed to improperly transfer equity into the firm he was working for, known as "Firm D." The exchange's Business Conduct Committee (BCC) found Baudillon guilty of violating several exchange rules, leading to his permanent ban from accessing all ICE Futures U.S. electronic trading platforms.

Exposing the Intricate Web of Illicit Equity Transfers

Coordinating Trades to Benefit Firm D at Firm C's Expense

The investigation revealed that Baudillon engaged in coordinated trading in different illiquid Cotton No. 2 options markets on several days in May 2024. These trades were executed in a manner that financially benefited Firm D at the expense of another firm, Firm C. By exploiting the illiquid nature of these markets, Baudillon was able to manipulate the trades to his advantage, undermining the integrity of the exchange.

The "Money Pass" Scheme in Coffee "C" Options

In a separate incident, Baudillon was found to have participated in a "money pass" scheme involving a March 2024 Coffee "C" Option trade in February 2024. This scheme resulted in a significant transfer of equity from a separate firm's (Firm B) account into Firm D's account, further demonstrating Baudillon's disregard for fair and ethical trading practices.

Spread Trade Misallocation Scheme in Coffee "C" and Cocoa Futures

The investigation also uncovered Baudillon's involvement in a spread trade misallocation scheme in different Coffee "C" and Cocoa Futures markets on several days in February 2024. This scheme financially benefited Firm D at the expense of Firm B, once again highlighting Baudillon's willingness to engage in manipulative and unethical trading practices.

Failure to Participate in the Disciplinary Process

Notably, Baudillon failed to participate in the disciplinary process and did not appear at the BCC meeting to contest the facts presented in the investigation report prepared by the Market Regulation Department. This lack of cooperation further underscores the severity of the allegations against him and his apparent disregard for the exchange's rules and regulations.

Permanent Ban and Clearing Member Responsibilities

As a result of the BCC's findings, Baudillon has been permanently banned from accessing all ICE Futures U.S. electronic trading platforms, including ICE Block. The exchange has also requested that any Clearing Member that clears customer business for ICE Futures U.S. markets and has a customer relationship (directly or indirectly) with Baudillon immediately deny him access and notify the exchange. Failure to promptly notify the exchange of such information may result in a violation of exchange rules, highlighting the importance of maintaining the integrity of the trading ecosystem.The disciplinary action taken by ICE Futures U.S. against Victor Baudillon serves as a stark reminder of the exchange's commitment to upholding its rules and protecting the fairness and transparency of the markets it oversees. This case underscores the need for vigilance and accountability within the financial industry, as the consequences of such egregious misconduct can have far-reaching implications for the entire trading community.