NOTICE OF DISCIPLINARY ACTION

MEMBER:

SIMON POSEN

EXCHANGE RULES:

Rule 575.A. Disruptive Practices Prohibited

A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

Rule 575.D. Disruptive Practices Prohibited

D. No person shall enter or cause to be entered an actionable or non-actionable message with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

FINDINGS:

Pursuant to an offer of settlement Simon Posen (“Posen”) presented at a hearing on November 21, 2016, in which Posen neither admitted nor denied the rule violations or any of the findings or conclusions herein upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“BCC”) found that Posen was a COMEX member and therefore subject to the jurisdiction of the Exchange pursuant to Rules 400 and 402, and that on multiple dates from November 2014 through March 2015, Posen entered orders or layered orders in the Silver and Copper futures contract without the intent to trade but to encourage market participants to trade opposite his smaller orders that were resting on the opposite side of the book. Typically within seconds after receiving a fill on his smaller orders, Posen would cancel the resting orders he had entered on the opposite side of the order book.

The Panel also found that on multiple dates between February 2015 and March 2015 in the Silver and Copper futures market, Posen engaged in a pattern of disruptive trading in which he entered orders on one side of the market and smaller orders on the other side resulting in other market participants trading his smaller orders. Posen typically would trade on the side of the market where his smaller exposure existed and then reverse the pattern, resulting in alternating buy-side and sell-side market imbalances.

The Panel found that as a result of the above, Posen violated Exchange Rules 575.A. and 575.D.

PENALTY:

In accordance with the settlement offer, the Panel: 1) ordered Posen to pay a $90,000 fine; and 2) ordered Posen to serve a four (4) week suspension of any access to any CME Group Inc. trading floor and of direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including CME Globex. The suspension shall run from November 23, 2016 through December 21, 2016, inclusive.