KENT RALPH EMERSON WHITNEY
APPLICABLE CBOT RULE:
402.C. BUSINESS CONDUCT COMMITTEE – EMERGENCY ACTIONS
1. The BCC is authorized to determine whether an emergency exists and whether emergency action is warranted. The following events and/or conditions may constitute emergencies:
e. Any circumstance in which it appears that a member or any other person or entity . . . is conducting business in such a manner that such person or entity cannot be permitted to continue in business without jeopardizing the safety of customer funds, Members, or the Exchange;
BASIS OF ACTION:
On May 24, 2010, a Panel of the CBOT Business Conduct Committee took an emergency action against member Kent R.E. Whitney. This action is based on a good faith determination that it appears that on April 16, 2010, Whitney placed several orders through floor clerks in the expiring S&P 500 options market on behalf of non-member David Parrish. The execution of these orders created a margin deficit in excess of $40 million, which would have caused Parrish’s account to be far under-margined.
At the time these orders were placed on April 16, Whitney was subject to a Summary Access Denial Action initially effective on January 28, 2010 and renewed on March 29, 2010, which summarily denied Whitney’s access to all CME Group markets, including the CME Globex platform, all trading floors owned or controlled by CME Group, and all clearing platforms owned or controlled by CME Group.
In the good faith exercise of its sole discretion, the Panel has good cause to believe that Whitney is, has been or will be conducting business in a manner that cannot be permitted to continue without jeopardizing the safety of customer funds, Members or the Exchange.
Pursuant to Rule 402.C., Whitney is hereby barred from directly or indirectly accessing all CME Group markets, including the CME Globex platform, all trading floors owned or controlled by CME Group, including CBOT, CME, NYMEX and COMEX, and all clearing platforms owned or controlled by CME Group.
This action prohibits Whitney from trading, placing orders (on his own or someone else’s behalf), or soliciting business on any exchange owned or controlled by CME Group. Whitney is also precluded from affiliating or doing business with any member or member firm of CBOT, CME, NYMEX or COMEX.
This action is effective for a period of 6 months, beginning immediately and continuing through and including November 24, 2010.
May 24, 2010
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