NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Stuart Madden

CME RULE VIOLATIONS:

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

It shall be an offense:

B.2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade.

Q. 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 532 (“Disclosing Orders Prohibited”) (in part)

[N]o person shall disclose another person's order to buy or sell except to a designated Exchange official or the CFTC, and no person shall solicit or induce another person to disclose order information. An order for pit execution is not considered public until it has been bid or offered by open outcry. No person shall take action or direct another to take action based on non-public order information, however acquired.

FINDINGS:

Pursuant to an offer of settlement in which Stuart Madden (“Madden”) neither admitted nor denied the rule violations upon which the penalty is based, on October 25, 2016, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that it had jurisdiction over Madden pursuant to Rules 402 and 418 for conduct that occurred on August 20, 2012 and thereafter, and that Madden voluntarily submitted himself to the jurisdiction of the BCC for purposes of settling this matter as it relates to conduct that occurred before August 20, 2012. The Panel found that between January 2011 and October 2012, Madden disclosed non-public order information related to the trading strategy used by the firm at which he was employed. Throughout the relevant time period, Madden’s disclosure of non-public order information allowed another trader to establish positions in the Euro FX Futures market and subsequently offset many of those positions through trading opposite Madden’s firm’s account. The Panel found that Madden’s activity resulted in profits of $407,491 to the other trader’s account.

The Panel concluded that Madden thereby violated CME Rules 432.B.2., 432.Q., and 532.

PENALTY:

In accordance with the settlement offer, the Panel ordered Madden to pay disgorgement of $407,491. The Panel ordered that Madden is jointly and severally liable, along with the other trader (see related disciplinary notice), for payment of the amount of disgorgement ordered. The Panel also ordered that Madden be permanently barred from (1) applying for membership and receiving any privileges of membership at any CME Group exchange; (2) direct or indirect access and use of any CME Group trading floor, electronic trading or clearing platform owned or operated by any CME Group exchange; and (3) affiliation with, employment by, or association with a broker association, guaranteed introducing broker, Member or affiliate of a Member of any CME Group exchange.

EFFECTIVE DATE:

October 27, 2016