CME RULE VIOLATIONS:
Rule 575.D. Disruptive Practices Prohibited (in part):
No person shall enter or cause to be entered an actionable or non-actionable message with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.
Pursuant to an offer of settlement in which Cody Easterday neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on May 23, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on multiple occasions from July 5, 2017, through August 2, 2017, Easterday entered orders in Live Cattle and Feeder Cattle with reckless disregard for the adverse impact on the orderly conduct of trading.
Specifically, during the post-settlement trading period, Easterday entered orders that partially offset large positions in Live Cattle and Feeder Cattle futures that he accumulated during regular trading hours. Easterday’s post-settlement order quantity exceeded all the quantity in five visible levels of the order book in relatively short periods of time and resulted in significant and disruptive price movements. The Panel further found that Easterday should have been aware that his orders were trading through the visible order book, and understood the potential for volatility before he entered aggressive orders for more than the total quantity showing on the buy or sell side.
The Panel concluded that Easterday thereby violated CME Rule 575.D.
In accordance with the settlement offer, the Panel ordered Easterday to pay a fine of $30,000 to the Exchange and to have his access to all CME Group trading floors and direct access to all electronic trading and clearing platforms owned or controlled by CME Group suspended for a period of 20 business days. The suspension shall begin on May 28, 2019, and continue through June 24, 2019.
May 28, 2019