• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT-16-0571-BC
      • Effective Date
      • 25 May 2018
    • FILE NO.:

      CBOT 16-0571-BC

      NON-MEMBER:

      Arjun Capital Limited

      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 Arjun Capital Limited (“Arjun”) neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on May 23, 2018, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that, on multiple trade dates between October 17, 2016, and October 27, 2016, an Arjun trader entered spread orders in EU Wheat futures contracts that matched opposite outright orders he placed on behalf of the same Arjun account. The Panel found that the trader should reasonably have known that his placement of orders would not result in a bona fide market position exposed to market risk. The Panel concluded that Arjun violated Exchange Rule 534.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Arjun to pay a fine in the amount of $20,000.

      EFFECTIVE DATE:

      May 25, 2018