CBOT RULE VIOLATION:
Rule 521 (“Trading Practices”) (in part)
In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader. Transactions may take place only at the best price available in the open outcry market at the time the trade occurs.
Pursuant to an offer of settlement in which Kevin Duffy (“Duffy”) neither admitted nor denied the rule violations upon which the penalty is based, on December 2, 2014, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that it had jurisdiction over Duffy pursuant to Rules 400 and 402 as the conduct occurred while Duffy was a CBOT member, and that on one or more occasions during October 2010, Duffy engaged in Corn futures trades opposite a local that had not been executed by open outcry. Specifically, although Duffy and the local did not bid or offer openly to the pit, the trades Duffy executed later cleared opposite the local on four trade dates. The Panel concluded that Duffy thereby violated CBOT Rule 521.
In accordance with the settlement offer, the Panel ordered Duffy to pay a fine of $10,000. The Panel also suspended Duffy for a period beginning on the effective date lasting five business days from accessing all CME Group Inc. trading floors, and indirect and direct access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. The suspension shall run from December 4, 2014, through and including December 10, 2014.
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