• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT-16-0455-BC-2
      • Effective Date
      • 20 September 2018
    • FILE NO.:

      CBOT 16-0455-BC

      MEMBER:

      Geneva Trading USA, LLC

      CBOT RULE VIOLATIONS:

      Rule 575 DISRUPTIVE PRACTICES PROHIBITED

      All orders must be entered for the purpose of executing bona fide transaction. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.

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

      Rule 433 STRICT LIABILITY FOR THE ACTS OF AGENTS

      Pursuant to Section 2(a)(1)(B) of the Commodity Exchange Act, and notwithstanding Rule 432.W., the act, omission, or failure of any official agent, or other person acting for any party within the scope of his employment or office shall be deemed the act, omission or failure of the party, as well as of the official, agent or other person who committed the act.

      FINDINGS:

      Pursuant to an offer of settlement in which Geneva Trading USA, LLC (“Geneva”) neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on September 18, 2018, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“BCC” or “Panel”) found that between September 1, 2015, and May 23, 2016, a trader acting as an agent of Geneva engaged in a pattern of activity in the Kansas City Wheat, Wheat, Soybean Meal, and Soybean futures markets by entering orders without the intent to trade. Specifically, the Panel found that the Geneva trader layered orders on one side of the market and then cancelled them after smaller resting orders on the opposite side of the order book were executed.

      The Panel concluded that, pursuant to CBOT Rule 433, Geneva is strictly liable for the acts of its agent whose conduct violated CBOT Rule 575.A.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Geneva to disgorge total profits in the amount of $12,035.10 in connection with this case and companion case CME 16-0455-BC ($8,424.57 of which is allocated to CBOT).

      EFFECTIVE DATE:

      September 20, 2018