NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 18-0868-BC

NON-MEMBER:

Alan Fraczek

CME RULE VIOLATION:

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.

FINDINGS:

Pursuant to an offer of settlement in which Alan Fraczek (“Fraczek”) neither admitted nor denied the rule violation or factual findings upon which the penalty is based, on March 6, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that between May 1, 2017 and December 8, 2017, Fraczek entered and canceled orders in the Live Cattle, Lean Hog, and Feeder Cattle spread markets on the Globex electronic trading platform during the pre-opening period that were not entered for the purpose of executing bona fide transactions but for the purpose of identifying the depth of the order book. The entry and cancellation of these orders caused fluctuations in the publicly displayed Indicative Opening Price. The Panel concluded that Fraczek thereby violated CME Rule 575.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Fraczek to pay a fine of $20,000. The Panel also suspended Fraczek from access to any CME Group trading floor and direct and indirect access to all electronic trading and clearing platforms owned or operated by CME Group for 10 business days, beginning on the effective date below and continuing through and including March 21, 2019.

EFFECTIVE DATE:

March 8, 2019