Quest Partners LLC
CBOT RULE VIOLATION:
Rule 432 (“General Offenses”) (in part)
It shall be an offense:
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.
Pursuant to an offer of settlement in which Quest Partners LLC (“Quest”), neither admitted nor denied the rule violations upon which the penalty is based, on August 8, 2018, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that on November 22, 2016, an automated trading system (“ATS”) deployed by Quest malfunctioned as a result of testing in its production environment. After the testing of the updates was completed, Quest attempted to rollback the updates to resume trading with the technology that was previously in place. However, some of the updates were not rolled back and, on November 22, 2016, from 7:10:12.485 AM through 7:10:15.886 AM, the malfunction caused orders to be routed to an executing broker’s algorithm and submitted to the market. The orders resulted in the unintentional execution of trades, sharp price movements, and volume aberrations in the December 2016 Ultra U.S. Treasury Bond, December 2016 10-Year T-Note, December 2016 U.S. Treasury Bond, December 2016 5-Year T-Note, December 2016 Corn, March 2017 Wheat and January 2017 Soybean futures contract markets. The Panel further found that since this incident, Quest has enhanced its automated trading system risk control policies.
The Panel concluded that Quest thereby violated CBOT Rule 432.Q.
In accordance with the settlement offer, the Panel ordered Quest to pay a fine of $15,000.
August 10, 2018
Also reference CME-16-0593-BC, NYMEX-16-0593-BC and COMEX-16-0593.