• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-14-9725-BC
      • Effective Date
      • 18 October 2019
    • FILE NO.:

      CME 14-9725-BC

      MEMBER:

      Harris Andrew Klein (HRIS)

      CME RULE VIOLATIONS:

      521. REQUIREMENTS FOR OPEN OUTCRY TRADES (in part)

      In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader. Transactions may take place only at the best price available in the open outcry market at the time the trade occurs.

      539. PREARRANGED, PRE-NEGOTIATED AND NONCOMPETITIVE TRADES PROHIBITED (in part)

      539 A. General Prohibition

      No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction.

      FINDINGS:

      Pursuant to an offer of settlement in which Harris Andrew Klein neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, on October 16, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on one or more occasions from December 3, 2013, through April 9, 2014, Klein prearranged and noncompetitively executed trades opposite another broker in the options on Standard and Poor’s 500 Stock Price IndexTM futures pit, and on one occasion increased the quantity on a trade without executing the additional quantity in the market.

      The Panel concluded that Klein thereby violated CME Rules 521. and 539.A.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Klein to pay a fine of $15,000 to the Exchange. The Panel also suspended Klein’s access to any trading floor, and direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility, owned or controlled by CME Group for a period of 25 business days. The suspension shall run from October 18, 2019, through and including November 21, 2019.

      EFFECTIVE DATE:

      October 18, 2019