• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-16-0369-BC-6
      • Effective Date
      • 03 November 2017
    • FILE NO.:

      CME 16-0369-BC

      NON-MEMBER:

      Carmen Doering

      CME RULE VIOLATIONS:

      Rule 432. General Offenses

      It shall be an offense:

      C. to engage in dishonest conduct.

      Rule 515 MRAN RA1602-2 [Effective April 1, 2016]

      B. Restrictions

      Order executions in restricted contract months by members of a broker association opposite other members of the same broker association will be limited to 20% per month.

      . . .

      Best and Only Bid and Offer Documentation

      In circumstances where two members of the same broker association trade opposite one another in a contract month subject to the trading restrictions set forth above, and at the time the trade is executed one member is the best and only bid and the other member is the best and only offer, the quantity associated with the execution will be removed from each member’s monthly intra-association percentage restrictions provided that all of the following requirements are met:

      1. A note is made on the trading document by one of the two members involved in the trade indicating that at the time the trade was executed, one member was the best and only bid and the other member was the best and only offer in the pit. Noting “B&O” on the trading document is sufficient for this purpose. That notation must be made contemporaneously with the trade being made.

      2. The time of the trade to the nearest minute is recorded on the trading document containing the B&O notation.

      3. A signature and a legible acronym of a member (or the signature of an Exchange official) attesting to the fact that the members were the best and only bid and best and only offer at the time the trade was made must be noted on the trading document. The signature and acronym of the member (or the signature of the Exchange official) must be obtained as soon as possible after the trade has been made. Members executing the trade may request signatures only from members (or Exchange officials) who were present when the trade was made. Members signing such trading documents may do so only if they were present and can attest to the fact that the trade was a best and only bid and offer at the time it was made. Members of the same broker association are not eligible to sign as a witness for this purpose.

      4. Copies of the documentation are forwarded to the Market Regulation Department...

      Properly documented best and only bids and offers will be removed from each member’s intra-association trading volume and total trade volume whencalculating compliance with the applicable trading restrictions. If the removal of the volume associated with the best and only bids and offers results in the reduction of a member’s intra-association trading percentage to a non-violative level, the member will not be deemed to have violated Rule 515.E.

      FINDINGS:

      On June 28, 2017, a Panel of the Chicago Mercantile Exchange Probable Cause Committee charged non-member Carmen Doering, a broker association’s runner and trade checker, with violating CME Rules 432.C. and 515 based on allegations that on one or more occasions between September 2015, and September 2016, after Doering’s broker association received notice that it exceeded the monthly limit of intra-association order executions, Doering retroactively endorsed trading documents with “B&O” to give the false impression that the trades were executed between two brokers who were the best and only bid and offer at the time of execution. Doering then submitted the trading documents to Market Regulation. Further, on one or more occasions during this time, Doering and another non-member employee of the broker association engaged in dishonest conduct by endorsing and submitting trading documents to Market Regulation with witness signatures that the purported witness did not endorse himself.

      On October 4, 2017, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) entered an order finding that Doering failed to answer the charges issued against her. In failing to answer the charges, the Hearing Panel Chair further ordered that Doering was deemed to have admitted the charges issued and waived her right to a hearing on the merits of the charges.
      Pursuant to CME Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on October 18, 2017. The Panel found Doering guilty of committing the admitted charges.

      PENALTY:

      Based on the record and the Panel’s findings and conclusions, the Panel ordered Doering to pay a fine in the amount of $30,000, and barred her permanently from (1) membership and privileges at any CME Group Exchange, (2) direct or indirect access and use of any CME Group trading floor, electronic trading platform or clearing platform owned or operated by any CME Group Exchange, and (3) affiliation with, employment by or association with a Member (as this term is defined in Rule 400) or affiliate of a Member of any CME Group Exchange.

      EFFECTIVE DATE:

      November 3, 2017