• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME 15-0334-BC
      • Effective Date
      • 20 September 2019
    • FILE NO.:

      CME 15-0334-BC

      NON-MEMBER:

      Gregory Kobus

      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, atthe time of order entry, to cancel the order before execution or tomodify the order to avoid execution.

      FINDINGS:

      Pursuant to an offer of settlement in which Gregory Kobus (“Kobus”) neither admitted nor denied the rule violations upon which the penalty is based, on September 18, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“BCC” or “Panel”) found that between December 1, 2015, and June 30, 2016, Kobus entered and cancelled orders in the February 2016 – April 2016 Live Cattle futures spread market, the June 2016 – August 2016 Live Cattle futures spread market, and the April 2016 – June 2016 Hogs futures spread market without the intent to trade. Specifically, the Panel found that after receiving a fill on the resting smaller order, Kobus cancelled the layered orders on the opposite side of the market.

      The Panel also found that, on multiple occasions between January 7, 2015, and August 24, 2015, Kobus entered, modified, and canceled orders on the Globex electronic trading platform during the pre-opening sessions in CME Livestock futures markets, which were not made in good faith for the purpose of executing bona fide transactions. The entry and cancelation of these orders caused fluctuations in the publicly displayed Indicative Opening Price.

      The Panel thus concluded that Kobus thereby violated CME Rules 575.A.

      PENALTY:

      In accordance with the settlement offer, and after taking Kobus’s financial condition into consideration when it levied the sanction, the Panel ordered Kobus to pay a fine to the Exchange in the amount of $5,000. The Panel also suspended Kobus from direct and indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or controlled by CME Group beginning on the effective date below and continuing for six months after the fine is paid in full.

      EFFECTIVE DATE:

      September 20, 2019