Credit Suisse Securities (USA) LLC
CBOT RULE VIOLATION:
(Legacy) Rule 526 Block Trades (in part)
A. A block trade must be for a quantity that is at or in excess of the applicable minimum threshold. Orders may not be aggregated in order to achieve the minimum transaction size, except by those entities described in Sections I. and J.
F. The seller must ensure that each block trade is reported to the Exchange within five minutes of the time of execution; except that block trades in interest rate futures and options executed outside of Regular Trading Hours (7:00 a.m. – 4:00 p.m. Central Time, Monday – Friday on regular business days) must be reported within fifteen minutes of the time of execution …
Pursuant to an offer of settlement in which Credit Suisse Securities (USA) LLC (“Credit Suisse”) neither admitted nor denied the rule violations upon which the penalty is based, on August 19, 2014, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee found that it had jurisdiction over Credit Suisse pursuant to Rules 400 and 402 as the conduct occurred while Credit Suisse was a CBOT member, and that on multiple dates between February 4, 2010, and August 29, 2012, Credit Suisse executed block trades in various Treasury futures contracts and did not report those trades to the Exchange within the applicable time limit following execution and further, reported many of these same block trades to the Exchange with inaccurate execution times. The Panel concluded that Credit Suisse thereby violated CBOT Rule 526.F.
Additionally, the Panel found that on November 12, 2010, Credit Suisse executed a block trade which did not meet the applicable minimum quantity requirement for a block trade. The panel found that in so doing, Credit Suisse violated Rule 526.A.
In accordance with the settlement offer, the Panel ordered Credit Suisse to pay a fine of $120,000.
August 21, 2014
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