• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT-18-0936-BC-2
      • Effective Date
      • 18 October 2019
    • FILE NO.:

      CBOT 18-0936-BC

      NON-MEMBER:

      James Harkness

      CBOT 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 James Harkness (“Harkness”) neither admitted nor denied the rule violation upon which the penalty is based, on October 16, 2019, a Panel of the Chicago Board of Trade Business Conduct Committee (“BCC or “Panel”) found that between calendar dates February 27, 2018, and February 28, 2018, during overnight trading hours, Harkness entered and cancelled orders in the May 2018 Soybean futures contract without the intent to trade. Specifically, the Panel found that Harkness layered orders on one side of the order book and cancelled them after resting smaller orders on the opposite side of the book were executed. The Panel further found that, in various instances, Harkness coordinated this activity with other market participants such that Harkness entered and cancelled orders while others received the intended trade, and others entered and cancelled orders while Harkness received the intended trade. The Panel concluded that Harkness thereby violated CBOT Rule 575.A.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Harkness to pay a $20,000 fine. The Panel also suspended Harkness from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group for twenty business days, beginning on the effective date below and continuing through and including November 14, 2019.

      EFFECTIVE DATE:

      October 18, 2019