CBOT RULE VIOLATIONS:
Legacy RULE 432 GENERAL OFFENSES (in part)
It shall be an offense:
B. to engage in fraud, bad faith or in conduct or proceedings inconsistent with just and equitable principles of trade;
RULE 539.A PREARRANGED, PRE-NEGOTIATED AND NONCOMPETITIVE TRADES PROHIBITED (in part)
A. General Prohibition
No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction.
Pursuant to an offer of settlement in which John Roach neither admitted nor denied the rule violations upon which the penalty is based, on 2013, a Panel of the CBOT Business Conduct Committee found that on December 31, 2009, January 4, 2010, and March 5, 2010, Roach executed a series of trades on the CME Globex® electronic trading platform by prearranging transactions in the January 2010 Soybeans and March 2010 Corn futures markets opposite another member that were prearranged for the purpose of freshening his positions. In the December 31, 2009, and January 4, 2010, instances, Roach entered orders opposite another member for identical quantities and prices, and the maximum time differential between the order entries was 1.501 seconds. On March 5, 2010, he entered orders that matched the same member’s orders, and the maximum time differential between the order entries was 6.396 seconds. The Panel concluded that in so doing, Roach violated CBOT Rules 432.B. and 539.A.
In accordance with the settlement offer, the Panel ordered Roach to pay a fine of $5,000. The Panel also barred Roach for a period beginning on the effective date and lasting 30 business days from applying for membership privileges on any CME Group Inc. exchange, accessing all CME Group Inc. trading floors, and direct access to all electronic trading and clearing platforms owned or controlled by CME Group Inc.
March 18, 2013
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