NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

MARK MILLER

EXCHANGE RULES:

CBOT RULE 432. GENERAL OFFENSES

It shall be an offense:

B.1. to engage in fraud or bad faith;

B.2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;

G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts;

T. to engage in dishonorable or uncommercial conduct.

FINDINGS:

Pursuant to an offer of settlement Mark Miller (“Miller”) presented at a hearing on June 25, 2020, in which Miller neither admitted nor denied the findings or rule violations upon which the penalty is based, a Panel of the CBOT Business Conduct Committee (“Panel”) found that on multiple dates during the time period from June 1, 2015 through June 30, 2016 (“relevant time period”), Miller, the primary trader and a principal for Foremost Trading, LLC (“Foremost”), engaged in dishonorable and uncommercial conduct inconsistent with just and equitable principles of trade in the Corn futures, Soybean futures and options, Wheat-Corn spreads, E-mini Dow futures and options and U.S. Treasury Bond futures and options. Miller engaged in over three hundred “matched” trades, which were trades in which Miller’s Tag 50 IDs were on both sides of the market and the trade involved a full or partial match event between two separate orders on opposite sides of the market across all four CME Group Designated Contract Markets. In these matched trade instances, a customer account (“Customer A”) over which Miller had Power of Attorney, was on one side of the trade and one of Foremost’s proprietary accounts was on the opposite side. Many of these trades occurred in options markets with extremely low liquidity to ensure the match between these accounts.

The Panel found that on multiple occasions, the matched trades consisted of the Miller pre-arranging round-turn transactions between a Foremost account and Customer A’s account for the purpose of transferring equity from Customer A’s account to Foremost account(s), which resulted in the Foremost’s account receiving advantageous prices. The Panel further found that during the relevant time period, Miller’s trading disadvantaged Customer A’s account in the amount of $479,858.93.

The Panel found that as a result, Miller violated CBOT Rules 432.B.1., 432.B.2., 432.G. and 432.T.

PENALTY:

In accordance with the settlement offer, the Panel ordered Miller to pay a fine in the amount of $200,000 ($35,000 of which is payable to CBOT), and that Miller and Foremost jointly and severally pay restitution in the amount of $479,858.93 ($8,799.27 of which is attributed to activity on CBOT). The Panel also barred Miller 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 two years, beginning on the effective date and continuing through and including July 6, 2022. Further, the Panel permanently barred Miller from: (1) trading on a discretionary basis for or on behalf of any person or entity, whether by power of attorney or otherwise; and (2) entering customer orders in a brokerage capacity on any CME Group Inc. Exchange.

The suspension shall run from July 6, 2020 through July 6, 2022, inclusive.

Please see companion cases CME/NYMEX/COMEX 16-0484-BC.