• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT 16-0391
      • Effective Date
      • 19 July 2019
    • FILE NO.:

      CBOT 16-0391-BC

      MEMBER:

      Peter James Douglass

      CBOT RULE VIOLATIONS:

      Rule 540.A. Responsibility for Customer Orders (in part)

      A Member is prohibited from directly or indirectly guaranteeing the execution of an order or any of its terms such as the quantity or price. A Member may only report an execution that has occurred as a result of open outcry, has been effected through the Globex platform, or has been executed as a permissible privately negotiated transaction. This rule shall not be construed to prevent a Member from assuming or sharing in the losses resulting from an error or the mishandling of an order.

      FINDINGS:

      Pursuant to an offer of settlement in which Peter James Douglass neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on July 17, 2019, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on September 29, 2015, Douglass received a customer order to purchase 4,000 November 2015 10-Year option spread contracts. Subsequent to receiving a market from the brokers in the trading pit, and prior to placing the order in the pit for execution, Douglass informed the customer that the order had been filled. Douglass next called the order in to the pit for execution only after he guaranteed the fill to the customer. When informed by the brokers that only 1,700 contracts of the order had been filled, Douglass nonetheless informed the customer that 2,000 contracts had been filled, all at a single price. The Panel therefore found that Douglass guaranteed the execution of the order.

      The Panel concluded that Douglass thereby violated CBOT Rule 540.A.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Douglass to pay a fine in the amount of $20,000 and to serve a five-business day suspension from accessing any CME Group Inc. trading floor and all direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. The suspension shall begin on the effective date below and continue through July 25, 2019, inclusive.

      EFFECTIVE DATE:

      July 19, 2019