CME RULES VIOLATIONS:
(Legacy) Rule 432 GENERAL OFFENSES
It shall be an offense:
G. to act as both buyer and seller in the same transaction.
534. WASH TRADES PROHIBITED
No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, 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 or negate market risk or price competition shall 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.
539 PREARRANGED, PRE-NEGOTIATED AND NON-COMPETITIVE TRADES PROHIBITED
A. No person shall prearrange or pre-negotiate any purchase or sale or non-competitively execute any transaction.
Pursuant to an offer of settlement in which Jack DiCapo neither admitted nor denied the rule violations upon which the penalty is based and after voluntarily submitting himself to the jurisdiction of the Exchange for purposes of resolving this matter, on April 7, 2011 a panel of the CME Business Conduct Committee found that between May 2008 and April 2009, DiCapo executed numerous round-turn transaction sets on the CME Globex electronic platform in the E-Mini Standard & Poor’s Midcap 400 Stock Price Index futures contracts between accounts beneficially owned by DiCapo at different firms in order to avoid monthly fees imposed by one of the firms for account inactivity.
The Panel found that in so doing, DiCapo violated CME Rules 534, 539.A. and Legacy CME Rule 432.G.
In accordance with the settlement offer, the Panel fined DiCapo $20,000 and suspended his direct access to any CME Group Inc. electronic trading or clearing platform for a period of 15 days. The suspension shall run from April 11, 2011 through May 2, 2011, inclusive. Failure to pay the fine within the 15 day suspension will result in an indefinite suspension until the fine is paid.
April 11, 2011
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