NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 18-1006-BC

MEMBER:

Element Capital Management LLC

CBOT VIOLATION:

562. Position Limit Violations (in part)

Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations. 

FINDINGS:

Pursuant to an offer of settlement in which Element Capital Management LLC (“Element Capital”) neither admitted nor denied the rule violation upon which the penalty is based, on March 6, 2019, a Panel of the CBOT Business Conduct Committee (“Panel”) found that at the close of business on August 9, 2018, Element Capital held a futures position of 8,141 short December 2018 Soybean Oil contracts (“Dec18 Soybean Oil”), 141 contracts (1.76%) over the single and all month limit of 8,000 contracts. On August 10, 2018, Element Capital increased its Dec18 Soybean Oil short position by 153 contracts for a total of 294 contracts (3.68%) over the single and all month limit. After realizing it was over the limit on August 10, 2018, Element Capital promptly liquidated its overage to bring its position into compliance, resulting in a profit of $86,365.44. The Panel found that Element Capital thereby violated CBOT Rule 562.

PENALTY:

In accordance with the settlement offer, the Panel ordered Element Capital to pay a fine in the amount of $15,000 and disgorgement in the amount of $86,365.44.

EFFECTIVE DATE:

March 8, 2019