NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Fredrik Nielsen

CBOT RULE VIOLATIONS:

Rule 432.B.2. (“General Offenses”) (in part)

It shall be an offense to engage in conduct or proceedings inconsistent with just and equitable principles of trade.

Rule 432.Q. (“General Offenses”) (in part)

It shall be an offense to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange.

Rule 432.T. (“General Offenses”) (in part)

It shall be an offense to engage in dishonorable or uncommercial conduct.

FINDINGS:

Pursuant to an offer of settlement in which Fredrik Nielsen (“Nielsen”) neither admitted nor denied the rule violations upon which the penalty is based, on August 25, 2016, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that it had jurisdiction over Nielsen pursuant to Rules 402 and 418. The Panel further found that between February 2013 and February 2014, Nielsen engaged in a pattern of activity wherein he entered multiple, layered orders for E-mini Dow ($5) Futures contracts without the intent to trade. Specifically, Nielsen entered the layered orders to encourage market participants to trade opposite his smaller orders that were resting on the opposite side of the book. Once the smaller orders began trading, Nielsen would then cancel the resting layered orders that he had entered on the opposite side of the order book.

The Panel concluded that as a result of the foregoing, Nielsen violated CBOT Rules 432.B.2, 432.Q., and 432.T.

PENALTY:

In accordance with the settlement offer and in connection with companion case CME 14-9869-BC, the Panel ordered Nielsen to pay a fine in the amount of $65,000 ($30,000 of which is allocated to CBOT), and to have his access to all CME Group trading floors and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group suspended for a period of three weeks. The suspension shall run from August 29, 2016, through September 16, 2016, inclusively.

EFFECTIVE DATE:

August 29, 2016