GLENCORE GRAIN BV
CBOT RULE VIOLATIONS:
(legacy) Rule 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.
Rule 432.W. GENERAL OFFENSES
It shall be an offense for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
Pursuant to an offer of settlement in which Glencore Grain BV (“Glencore”) neither admitted nor denied any rule violations upon which the penalty is based, on January 27, 2012, a panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee found that on one or more occasions between January 2009 and July 2009, two employees of Glencore executed 7 transactions totaling 495 contracts in non-spot month Soybean Oil, Soybean Meal, and Wheat futures contracts where there was common beneficial ownership on both sides of the transactions. The opposing buy and sell orders were placed with the knowledge and intent that the orders would match opposite one another, and Glencore’s purpose in doing so was to transfer positions from one account to another. The panel found that in doing so, Glencore violated CBOT Rules 534 and 432.W.
In accordance with the offer of settlement, the Panel fined Glencore $35,000.
January 31, 2012
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