NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

William Zobel

CBOT RULE VIOLATIONS:

Rule 534 Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

FINDINGS:

Pursuant to an offer of settlement in which William Zobel neither admitted nor denied the rule violations upon which the penalty is based, on May 27, 2020, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on five occasions between November 2018, and January 2019, Zobel entered buy and sell orders in various Oats options contracts, resulting in 154 self-matched contract sides, for accounts in which his employer maintained ownership and control on both sides of the transactions. Specifically, Zobel traded both a hedge account and a speculative account for his employer. In an attempt to obtain a more beneficial fill for the hedge account, Zobel did the following: asked for a market from a floor broker; entered opposing orders for each account with the floor broker in the pit, which improved the existing bid/ask spread; and instructed the broker to trade the speculative account opposite the hedge account for any remaining quantity of the hedge-account order if no other market participants were interested in trading at that price.

The Panel concluded that Zobel thereby violated CBOT Rule 534.

PENALTY:

In accordance with the settlement offer, and after taking into consideration that Zobel’s employer self-reported the activity to CME Group Inc., the Panel ordered Zobel to pay a fine of $5,000 and suspended him 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 controlled by CME Group for ten business days, beginning on the effective date below and continuing through and including June 11, 2020.

EFFECTIVE DATE:

May 29, 2020