Wolverine Trading, LLC
CBOT RULE VIOLATIONS:
432. General Offenses
It shall be an offense:
Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
Pursuant to an offer of settlement in which Wolverine Trading, LLC (“Wolverine”) neither admitted nor denied the rule violations upon which the penalty is based, on November 20, 2019, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on November 30, 2017, over a period of less than two hours, an automated trading system (“ATS”) deployed by Wolverine sent five bursts of message packets, lasting three to four seconds each, to the Exchange. The message packets, which consisted of a large volume of invalid, non-actionable messages, saturated the Market Segment Gateway (“MSGW”) used for CBOT Interest Rate Futures products. To prevent a MSGW failure, the Global Command Center closed the port assigned to Wolverine that was responsible for sending the excessive messages. The Panel also found that the activity was caused by a malfunction in the ATS after Wolverine implemented a software upgrade to the ATS. Further, though Wolverine was aware that the ATS experienced connectivity issues, it continued to re-connect the ATS to the Exchange without first examining the cause of the malfunction. The Panel thus concluded that Wolverine thereby violated CBOT Rules 432.Q. and 432.W.
In accordance with the settlement offer, the Panel ordered Wolverine to pay a fine of $100,000.
November 22, 2019