CBOT RULE VIOLATIONS:
Rule 432 GENERAL OFFENSES
It shall be an offense:
D. to create or report a false or fictitious trade;
L.1. to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing or in connection with any investigation;
On September 1, 2011, a panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“BCC”) took disciplinary action against Rudolph Borik (“Borik”), a former clerk of a CBOT member. On July 26, 2011, a Hearing Panel Chair of the CBOT BCC found that Borik had failed to file an answer to charges issued against him by a panel of the CBOT Probable Cause Committee. The Hearing Panel Chair accordingly ruled that the charges issued against Borik were deemed admitted, and through this admission, Borik had forfeited his right to a hearing on the merits of the charges. Pursuant to CBOT Rule 407 and 408, a penalty hearing was held before a Panel of the CBOT BCC (“Panel”) on September 1, 2011, related to these admitted charges. The Panel found Borik guilty of having committed the admitted charges, which alleged that between January and March 2009 Borik knowingly reported nine fictitious Dow futures trades belonging to a member-trader to the trader’s clearing firm, six of which were reported to the Exchange for clearing, for the purpose of concealing that member’s futures positions and to avoid significant performance bond requirements.
Further, the Panel found that Borik failed to appear before Exchange staff to answer questions in connection with an investigation of the above trade reporting activity.
The Panel found that in so doing, Borik violated CBOT Rules 432.D. and 432.L.1.
In accordance with its findings, the Panel ordered that Borik: (i) pay a fine to the Exchange in the amount of $250,000; and (ii) bars him for a period of five years from (1) applying for membership at any exchange owned, controlled, or operated by CME Group Inc., (2) affiliating with any exchange Member, as defined in CBOT Rule 400, related to business conducted on or subject to the rules of the Exchange, and (3) directly or indirectly accessing, placing orders, or executing trades on any trading or clearing platform owned, controlled, or operated by CME Group Inc., including, but not limited to, the CME Globex electronic trading platform.
October 4, 2011
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