• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT-17-0654-BC
      • Effective Date
      • 27 October 2017
    • FILE NO.:

      CBOT 17-0654-BC

      NON-MEMBER:

      Joshua Mathers

      CBOT RULE VIOLATION:

      Rule 534. Wash Trades Prohibited

      No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

      FINDINGS:

      Pursuant to an offer of settlement in which Joshua Mathers (“Mathers”) neither admitted nor denied the rule violation upon which the penalty is based, on October 25, 2017, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that on several dates between June and November 2016, Mathers, as Risk Manager solely responsible for managing the positions held by his employer, entered multiple matching buy and sell orders on the CBOT Globex trading platform in Kansas City Hard Red Winter Wheat futures contracts for accounts with common beneficial ownership on both sides of the market. The matching buy and sell orders were entered with the knowledge and intent that the orders would match opposite one another for the purpose of transferring positions between accounts. The Panel concluded that Mathers thereby violated CBOT Rule 534.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Mathers to pay a $25,000 fine and to have his access to all CME Group trading floors and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including CME Globex, suspended for 5 business days. The suspension shall run from the effective date below through November 2, 2017, inclusive.

      EFFECTIVE DATE:

      October 27, 2017