JB DRAX HONORE INC.
CME RULE VIOLATIONS:
432 GENERAL OFFENSES (in part)
It shall be an offense:
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
Pursuant to an offer of settlement in which JB Drax Honore Inc. (“JB Drax”) neither admitted nor denied the rule violations upon which the penalty is based, on May 21, 2015, a Panel of the CME Business Conduct Committee (“Panel”) found that it had jurisdiction over JB Drax pursuant to Rules 400 and 402 as the conduct occurred while JB Drax was a CME member. The Panel also found that between March 23, 2012, and July 2, 2013, various JB Drax desk brokers engaged in a pattern of conduct in Eurodollar options on futures whereby the desk brokers, both individually and in conjunction with other JB Drax desk brokers, disclosed customers’ nonpublic order information for the purpose of prearranging the execution of the orders opposite other customers’ orders in their possession, and executed these orders at market prices. The Panel further found that JB Drax employees presented the orders to the pit only after securing both sides of the transaction or guaranteeing a fill to the customer. Moreover, the Panel found that JB Drax failed to diligently supervise these employees in a manner sufficient to ensure that their conduct was consistent with Exchange rules. The Panel concluded that JB Drax thereby violated CME Rule 432.W.
In accordance with the settlement offer, the Panel ordered JB Drax to pay a fine of $70,000.
May 26, 2015
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