• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-18-0886-BC
      • Effective Date
      • 22 November 2019
    • FILE NO.:

      CME 18-0886-BC

      MEMBER:

      Brian Young

      CME RULE VIOLATIONS:

      Rule 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.

      Rule 539. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited (in part)

      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 Brian Young (“Young”) neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on November 20, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on numerous occasions between January 10, 2018, and April 24, 2018, and on April 17, 2019, and June 13, 2019, Young, while acting as a local in the Standard and Poor’s 500 Stock Price Index futures pit (“S&P”), prearranged and noncompetitively executed trades opposite a local. Further, Young executed the trades opposite the local without openly bidding or offering the orders.

      Specifically, the Panel found that between January 10, 2018, and April 24, 2018, after the local initiated a long or short position for S&P futures in the pit, Young, using his E-mini clerk, executed a trade on Globex for a corresponding quantity of E-mini S&P futures contracts (“E-mini”) in the opposite direction of the local’s S&P futures pit trade. Shortly thereafter, Young and the local carded up a trade opposite each other in order to offset positions in both accounts.

      Additionally, the Panel found that on April 17, 2019, and June 13, 2019, Young noncompetitively traded opposite a different local in the S&P pit after engaging in pre-execution communications about the local’s position on Globex, and on another occasion, discussing the time at which Young was to look at the local to execute a trade.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Young to pay a $15,000 fine. The Panel also suspended Young 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 operated by CME Group for five business days, beginning on the effective date below and continuing through and including November 29, 2019.

      EFFECTIVE DATE:

      November 22, 2019