THOMAS R. STEWART
CME RULE VIOLATIONS:
Rule 530. PRIORITY OF CUSTOMERS’ ORDERS
A member shall not buy (sell) a futures contract, buy (sell) a call option or sell (buy) a put option for his own account, an account in which he has a direct or indirect financial interest, or an account over which he has discretionary trading authority when he is in possession of an executable order for another person to buy (sell) a futures contract, buy (sell) a call option or sell (buy) a put option in the same product, regardless of the venue of execution. All contract months in a given futures product and all options on the futures product, in addition to any corresponding alternative sized (mini or micro) futures or options contracts on a given product, shall be considered the same product for the purposes of this rule.
Pursuant to an offer of settlement in which Thomas Stewart neither admitted nor denied the rule violation upon which the penalty is based, on March 24, 2011, a Panel of the CME Business Conduct Committee found that on four occasions between February and July 2009, Stewart placed orders on the CME Globex electronic trading platform and executed trades in Frozen Pork Bellies futures for his own account prior to, and at better prices than, executable customer orders Stewart had in his possession that he subsequently executed in the trading pit. The Panel concluded that in so doing, Stewart violated CME Rule 530.
In accordance with the settlement offer and in consideration of other factors in mitigation, the Panel fined Stewart $10,000, which includes disgorgement of $1,130 of profits. The Panel also suspended Stewart’s membership privileges, access to any CME Group trading floor, and direct access to any CME Group electronic trading or clearing platform for 30 days beginning on the effective date below and continuing through and including April 26, 2011. The Panel further permanently barred Stewart from executing customer orders beginning on the effective date below.
March 28, 2011
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