VIRGINIA McGATHEY (VM)
CBOT RULE VIOLATION:
527.D.1 OUTTRADES, ERRORS, AND MISHANDLING OF ORDERS
If a broker fails to execute an order or underbuys or undersells for an order, the broker shall do one of the following:
a. Execute the order or the remainder of the order in the market and adjust the customer by check if the customer is filled at a price less favorable than that to which he was entitled due to the broker’s error or mishandling of the order. If the order is filled at a more favorable price, the customer is entitled to the better price.
b. Execute the order or the remainder of the order in the market. If the order, or the remainder of the order, is filled at a worse price than that to which the customer was entitled but for the error or mishandling, the broker may allocate the fill to his error account, pursuant to Section C.1. above, provide the customer a fill at the price to which the customer was entitled, and place the opposite side of the customer fill into his error account. If the order is filled at a more favorable price, the customer is entitled to the better price.
Pursuant to an offer of settlement in which Virginia McGathey neither admitted nor denied the facts, on February 3, 2011, a panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee found that on five occasions between October 24, 2008 and December 11, 2009, McGathey failed to diligently execute some of her customer orders, failed to properly resolve outtrades and failed to competitively execute unfilled and underfilled orders in the market. The panel found that in doing so, McGathey violated CBOT Rule 527.D.1.
The Panel fined Virginia McGathey $20,000 and suspended her direct access to any trading floor or electronic trading or clearing platform owned or operated by CME Group, including CME Globex® for 5 business days. The suspension shall run from February 7, 2011 through February 11, 2011, inclusive.
February 7, 2011
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