CBOT RULE VIOLATION:
534. WASH TRADES PROHIBITED
No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.
539. PREARRANGED, PRE-NEGOTIATED AND NON-COMPETITIVE TRADES PROHIBITED
A. No person shall prearrange or pre-negotiate any purchase or sale or non-competitively execute any transaction.
Pursuant to an offer of settlement in which Eric Moncada neither admitted nor denied any rule violations upon which the penalty is based, on April 28, 2011, a panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee found that on one or more occasions between June 4, 2009 and November 6, 2009, Moncada entered opposing buy and sell orders into the CME Globex ® electronic trading platform for the purpose of transferring positions from one account to another and with the knowledge and intent that the orders would match opposite one another for accounts with common ownership. The panel found that in doing so, Eric Moncada violated CBOT Rules 534 and 539.
In accordance with the offer of settlement, the Panel fined Moncada $25,000.
May 2, 2011
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