CBOT RULE VIOLATION:
Rule 575. Disruptive Practices Prohibited (in part)
A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution;
Pursuant to an offer of settlement in which Paul Dow (“Dow”) neither admitted nor denied the rule violations upon which the penalty is based, on February 4, 2020, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee found that on one or more occasions between May 8, 2017, and July 30, 2018, Dow entered orders in CBOT KC HRW Wheat, Chicago SRW Wheat, and Corn futures markets on the Globex electronic trading platform during the pre-opening session that were not entered for the purpose of executing bona fide transactions. Rather, Dow entered these orders to discern the depth of the order book or the previous day’s settlement price. The entry and cancelation of these orders caused fluctuations in the publicly displayed Indicative Opening Price (“IOP”).
The Panel concluded that Dow thereby violated CBOT Rule 575.A.
In accordance with the settlement offer, the Panel ordered Dow to pay a fine in the amount of $10,000. The Panel also suspended Dow from access to any CME Group Inc. trading floor, and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. for 25 business days, beginning on the effective date below and continuing through and including March 11, 2020.
February 6, 2020