CBOT RULE VIOLATIONS:
Rule 432.Q. General Offenses – Acts Detrimental
It shall be an offense to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange.
Rule 432.T. General Offenses – Uncommercial Conduct
It shall be an offense to engage in . . . uncommercial conduct.
After an evidentiary hearing on the merits of the case on December 8, 2010, a Panel of the CBOT Business Conduct Committee found that on Friday, September 12, 2008, Scheck held a short September 2008 Soybean futures position beyond the contract’s expiration with no reasonable means to satisfy the delivery obligations that arose from the short position. The Panel further found that Scheck engaged in uncommercial conduct by failing to liquidate his short position prior to expiration. The Panel found that in so doing Scheck violated CBOT Rule 432.Q. and Rule 432.T.
On February 8, 2011, the Panel heard arguments from the parties pertaining to the penalty to be imposed for the violations above. Based on the record, the Panel’s findings and conclusions, and the arguments from the parties, the Panel ordered Scheck to pay a fine in the amount of $100,000 and suspended his membership privileges, access to the trading floor, and direct access to any CME Group electronic trading and clearing platforms, including CME Globex, for 20 business days, beginning on the effective date below and continuing through and including March 15, 2011.
February 15, 2011
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