Michael Dean Steinbis
CBOT RULE VIOLATIONS:
Rule 534 (“Wash Trades Prohibited”)(in part)
No person shall place or accept buy and sell orders in the same product and expiration month . . . where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition should also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.
Pursuant to an offer of settlement in which Michael Dean Steinbis (“Steinbis”) neither admitted nor denied the rule violations upon which the penalty is based, on July 27, 2016, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that Steinbis was subject to the jurisdiction of the Exchange pursuant to Rules 400 and 402 as the conduct occurred while he was a CBOT member. The Panel also found that on numerous dates between March 2013 and December 2013, he executed a number of wash trades involving Soybean, Corn and Wheat futures and options on futures contracts on Globex. Steinbis entered the orders for the purpose of moving positions between his accounts or to satisfy margin requirements, and he knew or reasonably should have known that the buy and sell orders would trade opposite orders placed for accounts with common beneficial ownership. The Panel concluded that this activity violated CBOT Rule 534.
In accordance with the settlement offer, the Panel ordered Steinbis to pay a fine of $30,000 and suspended his direct access to any trading floor or electronic trading or clearing platform owned or operated by CME Group, including CME Globex, for 10 business days. Steinbis’s suspension will run from July 29, 2016, to August 11, 2016, inclusive.
July 29, 2016
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