NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 17-0698-BC

NON-MEMBER:

Jeffrey Cabral

CME RULE VIOLATIONS:

Rule 534. Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

Rule 576. Identification of Globex Terminal Operators

Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.

FINDINGS:

Pursuant to an offer of settlement in which Jeffrey Cabral (“Cabral”) neither admitted nor denied the rule violations upon which the penalty is based, on July 24, 2018, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that from March 7, 2017 through March 9, 2017, Cabral entered opposing orders on behalf of accounts with common beneficial ownership in March 2017 Lumber futures contracts on Globex resulting in the self-matching of 22 contract sides. The matching buy and sell orders were entered with the knowledge and intent that the orders would match opposite one another for the purpose of moving positions between accounts. The Panel further found that Cabral entered the orders utilizing a Tag50 User ID registered to another individual.

The Panel concluded that Cabral thereby violated CME Rules 534 and 576.

PENALTY:

In accordance with the settlement offer, the Panel ordered Cabral to pay a fine in the amount of $15,000 and to serve a five-business day suspension from accessing any CME Group Inc. trading floor and all direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. The suspension shall begin on the effective date below and continue through August 1, 2018, inclusive.

EFFECTIVE DATE:

July 26, 2018