• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT-15-0142-BC-1
      • Effective Date
      • 04 December 2017
    • FILE NO.:

      CBOT 15-0142-BC

      MEMBER:

      Patrick Boyle

      CBOT RULE VIOLATIONS:

      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 trades or 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.

      Rule 539.A. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited

      No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction.

      FINDINGS:

      Pursuant to an offer of settlement in which Patrick Boyle (“Boyle”) neither admitted nor denied the rule violations upon which the penalty is based, on November 30, 2017, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that on certain dates in November 2014 and December 2014, Boyle prearranged the execution of transactions in Kansas City Wheat futures by instructing floor brokers to execute trades in accounts over which his employer maintained control, and where there was common beneficial ownership on both sides of the transactions. The opposing buy and sell orders were placed with the knowledge and intent that the orders would trade opposite one another. The purpose of these transactions was to freshen an existing position to avoid delivery. The Panel concluded that Boyle thereby violated CBOT Rules 534 and 539.A.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Boyle to: 1) pay a $10,000 fine; and 2) serve a five-business day suspension of any access to any CME Group Inc. trading floor and of direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including CME Globex. The suspension shall run from December 4, 2017, through December 8, 2017, inclusive.

      EFFECTIVE DATE:

      December 4, 2017