LEGACY CBOT REG. VIOLATION:
350.05 (Trading Practices)
The following acts are prohibited and shall constitute acts detrimental to the welfare of the Exchange (except as permitted under Regulation 331.05). This Regulation shall apply to all persons subject to the jurisdiction of the Exchange, and, unless otherwise specified, shall apply to both the open auction market and the e-cbot market.
(d) No person shall disclose at any time the existence or terms of an order that has not been disclosed to the market, except at the request of an authorized representative of the Exchange or of the Commission. . . .
Pursuant to an offer of settlement in which Giorgio Ferrari neither admitted nor denied the findings, on March 31, 2010, a Panel of the CBOT Business Conduct Committee (“Panel”) found that on November 28, 2006 and August 15, 2007, while working as a clerk for a member in the Treasury futures pits, Ferrari disclosed to a broker the existence of customer orders that had not yet been disclosed to the marketplace. In each instance, Ferrari gave a particular broker a “heads-up” to look for and trade opposite another broker who would be executing a customer order in the pit. Through Ferrari’s efforts, orders with opposing instructions, one to buy and one to sell the same contract month of the same commodity, matched through open outcry trading on each date. The Panel found that in so doing Ferrari violated legacy CBOT Regulation 350.05(d).
In accordance with the settlement offer, the Panel fined Ferrari $5,000 and suspended his access to any CME Group trading floor for 30 days, the period to commence April 1 and continue through April 30, 2010, inclusive.
April 5, 2010
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