DAVID LOHMAN (DLO)
CBOT RULE VIOLATION:
Rule 432. (General Offenses) (in part)
It shall be an offense:
T. to engage in uncommercial conduct
Pursuant to an offer of settlement in which David Lohman (“Lohman”) neither admitted nor denied the rule violation upon which the penalty is based, on January 27, 2012, a Panel of the CBOT Business Conduct Committee found that on September 16, 2009, while employed as a trader for a member firm of the Exchange, Lohman executed trades in the user defined December 2009 10-Year U.S. Treasury Note 119 Call – 115 Put risk reversal covered against futures at a price of 117.00½ on the CME Globex electronic trading platform wherein he entered individual 1-lot orders against the covered risk reversal so as to receive an over-allocation of short futures at a price of 117.00½, when the prevailing futures market was approximately 116.26 ½ bid, offered at 116.27. Lohman subsequently agreed to transfer the over-allocated futures back to the counter-party. The Panel found that in entering the 1-lot orders in such a manner, Lohman violated CBOT Rule 432.T. (To Engage in Uncommercial Conduct).
In accordance with the settlement offer and in consideration of evidence that there were no discernible profits realized by Lohman in executing these trades as the Exchange reversed the over-allocated futures, the Panel fined Lohman $20,000.
January 31, 2012
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