CME RULE VIOLATIONS:
Rule 432 - General Offenses
It shall be an offense:
G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.
Rule 533 - Simultaneous Buy and Sell Orders for Different Beneficial Owners
On the Globex platform, opposite orders for different beneficial owners that are simultaneously placed by a party with discretion over both accounts may be entered into the Globex platform provided that one order is exposed for a minimum of 5 seconds in the case of futures orders.
Rule 576 - Identification of Globex Terminal Operators
In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.
Pursuant to an offer of settlement in which Avi Butz (“Butz”), neither admitted nor denied the rule violation upon which the penalty is based and after voluntarily submitting himself to the jurisdiction of the Exchange for purposes of resolving this matter, on September 24, 2012, a Panel of the CME Business Conduct Committee (the “Panel”) found that on 24 trade dates from February 2010 through February 2011, Butz facilitated round-turn transactions of E-mini Standard & Poor’s 500 futures contracts and E-mini NASDAQ-100 futures contracts over the CME Globex electronic trading platform (“Globex”), some of which matched in less than five seconds, for the purpose of passing $19,668 between three accounts held by family and friends for which he had authorization to trade. In doing so, Butz violated CME Rules 432.G. and 533.
The Panel further found that Butz executed these transactions over Globex using the account owners’ individual TAG 50s and not his own individual user identification. In doing so, Butz violated CME Rule 576.
In accordance with the settlement offer, the Panel ordered Butz to serve a three (3) year bar from 1) applying for membership privileges on any CME Group Inc. exchange, 2) accessing all CME Group Inc. trading floors, and 3) direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group, including CME Globex. The penalty shall run from September 26, 2012 through September 25, 2015, inclusive.
September 26, 2012
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