• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-15-0078-BC
      • Effective Date
      • 21 December 2017
    • FILE NO.:

      CME 15-0078-BC

      MEMBER:

      Dan Ostroff

      CME RULE VIOLATION:

      Rule 575. Disruptive Practices Prohibited (in part)

      All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.

      A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

      FINDINGS:

      Pursuant to an offer of settlement in which Dan Ostroff neither admitted nor denied the rule violation upon which the penalty is based, on December 19, 2017, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee found that between September 15, 2014, and January 22, 2015, Ostroff entered orders in the December 2014 and March 2015 E-Mini S&P 500 futures (“E-Mini”) contracts without the intent to trade those orders. The Panel specifically found that Ostroff placed large orders on one side of the market opposite smaller orders resting on the other side of the market. The Panel found that the effect of this strategy was to induce market participants to trade opposite Ostroff’s smaller resting orders or better his bid/offer, which he would then trade against.

      The Panel concluded that Ostroff thereby violated CME Rule 575.A.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Ostroff to pay a fine in the amount of $35,000 and to serve a 25-day suspension from accessing any CME Group Inc. trading floor and all 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 21, 2017 through January 14, 2018.

      EFFECTIVE DATE:

      December 21, 2017