Thomas Guarnieri, Sr. (TMG)
CBOT RULE VIOLATION:
534. WASH TRADES PROHIBITED
No person shall place for the same beneficial owner buy and sell orders for the same product and expiration month, and, for a put or call option, the same strike price, at or about the same time with the intent to avoid a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders placed for the same beneficial owner in the same product and expiration month, and, for a put or call option, the same strike price, must be entered in good faith for the purpose of executing bona fide transactions that result in a change of ownership. Additionally, no person shall accept, execute or accommodate the execution of orders which are prohibited by this rule with knowledge of their character.
539. PREARRANGED, PRE-NEGOTIATED AND NON-COMPETITIVE TRADES PROHIBITED
A. No person shall prearrange or pre-negotiate any purchase or sale or non-competitively execute any transaction… .
Pursuant to an offer of settlement in which Thomas Guarnieri (TMG) neither admitted nor denied any rule violations upon which the penalty is based, on June 16, 2011, a panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee found that on one or more occasions between December 3, 2007 and December 6, 2007, Thomas Guarnieri executed a series of trades on the e-cbot electronic trading platform by pre-arranging the transactions in the Corn and Wheat futures market with two other members, and by so doing, engaged in indirect wash transactions in an attempt to freshen the dates of his previously established positions. The panel found that in doing so, Thomas Guarnieri, Sr. violated CBOT Rules 539.A and 534.
In accordance with the offer of settlement, the Panel fined Thomas Guarnieri, Sr. $20,000 and suspended membership privileges, access to any trading floor and direct access to any electronic trading or clearing platform owned or operated by CME Group, including CME Globex® for 30 calendar days. Thomas Guarnieri, Sr.’s suspension will run from June 20, 2011 through July 20, 2011, inclusive.
June 20, 2011
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