CME RULE VIOLATIONS:
Rule 529 Withholding Orders Prohibited
A Member (as defined in Rule 400), or any person entering orders on the Globex platform, shall not withhold or withdraw from the market any order, or any part of an order, for the benefit of any person other than the person placing the order.
Pursuant to an offer of settlement in which Thomas Hessling (“Hessling”) neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that Hessling was subject to the jurisdiction of the Exchange pursuant to Rules 400 and 402, as the conduct occurred while Hessling was employed by a CME member. The Panel further found that on August 7, 2013, Hessling withheld portions of a customer order for the benefit of obtaining a fill on a subsequent order placed by the same customer. Specifically, a customer entered consecutive orders to buy 10,000 contracts and sell 8,000 contracts in a single strike price in the Eurodollar options on futures pit. Hessling received both orders and initially instructed a broker in his group to work 2,000 contracts on the order. After that quantity had been executed, Hessling told the broker that the buy order was actually for 10,000 contracts. The broker immediately executed the balance of 8,000 contracts on the buy side opposite another broker from his group in the pit without openly bidding in the pit. The Panel concluded that by netting and withholding the two orders, Hessling thereby violated CME Rule 529.
In accordance with the settlement offer, the Panel ordered Hessling to pay a fine to the Exchange in the amount of $10,000 and serve a five business day suspension of access to any CME Group Inc. trading floor and of direct access to all electronic trading and clearing platforms owned or operated by CME Group Inc., including CME Globex. The suspension shall run from March 23, 2015, through March 27, 2015, inclusive.
March 23, 2015
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