• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-18-1007-BC
      • Effective Date
      • 27 November 2019
    • FILE NO.:

      18-1007-BC

      MEMBER:

      Martin Venit

      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 522. Acceptance of Bids and Offers

      In open outcry and electronic trading, while outstanding, all or any part of any bid or offer is subject to immediate acceptance by any trader. Members are required to honor all bids or offers which have not been withdrawn from the market. The price at which a trade is executed shall be binding, unless such trade is cancelled by Exchange officials in accordance with Exchange rules.

      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 Martin Venit (“Venit”) neither admitted nor denied the rule violations upon which the penalty is based, on November 25, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on August 7, 2018, and August 14, 2018, Venit, while executing customer orders in the Standard and Poor’s 500 Stock Price Index futures (“S&P”) pit, failed to transact at the best trade prices available in the open outcry market at the time the trades occurred. Further, Venit failed to treat an executed trade as binding, as the trade ultimately cleared at a different price than it was originally executed in the pit. Specifically, after executing the customer orders in the S&P pit at one price, Venit changed the execution price such that the trade cleared at a different price than it was originally executed. The non-competitive trading disadvantaged Venit’s customers in the amount of $1,250.

      The Panel concluded that Venit thereby violated CME Rules 521, 522, 539.A.

      PENALTY:

      In accordance with the settlement offer and after taking Venit’s financial condition into consideration when it levied the sanction, the Panel ordered Venit to pay a $5,000 fine and restitution in the amount of $1,250. The Panel also suspended Venit 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 one year. The suspension shall begin on November 27, 2019, and continue for a period of one year from the date that the ordered fine is paid in full.

      EFFECTIVE DATE:

      November 27, 2019