CBOT RULE VIOLATIONS:
Rule 501. Employees of Members (in part)
Members shall register with the Exchange all persons whom they wish to employ on the trading floor. Such employees may act as runners, communicators, clerks and broker assistants. Such employees shall not be permitted to solicit customers or benefit from the production of orders. Such employees shall not trade or have any interest in an account trading in any CBOT or CME futures or options contracts. Employees must wear a prescribed identification badge. Any member permitting trading by such employee shall be guilty of an offense against the Exchange.
Rule 576. Identification of Globex Terminal Operators
Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules.If user IDs are required to be registered with the Exchange,it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event,may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual's own unique user ID.
Pursuant to an offer of settlement in which non-member Isaac Rodriguez ("Rodriguez") neither admitted nor denied the rule violations upon which the penalty is based, on March 15,2012, a Panel of the Chicago Board of Trade ("CBOT") Business Conduct Committee found that beginning in 2008 and continuing through February 2010, while employed as a clerk for a CBOT Clearing Member Firm, Rodriguez placed trades in a member's personal trading account for his own benefit. Rodriguez entered and executed the trades on the Exchange's electronic trading platform using the member's unique terminal operator ID during the same time frame.Because this trading activity was not disclosed to the Exchange,Rodriguez failed to abide by regulatory,risk and clearing requirements. The Panel concluded that,in so doing, Rodriguez violated CBOT Rules 501.and 576.
In determining an appropriate sanction, the Panel took into consideration that the member who owned the account and was assigned the terminaloperator ID was aware that Rodriguez used both, knew that the clerk entered trades in his account as described in the Findings and the member was separately sanctioned. After considering this and all of the issues discussed above, the Panel fined Rodriguez $6,500 and suspended his access to any CME Group trading floor,and direct access to any CME Group electronic trading or clearing platform for five business days, beginning on the effective date below and continuing through and including March 23, 2012.
March 19, 2012
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