NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Lou Gen He

CBOT RULE VIOLATION:

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:

On March 3, 2020, the Chief Regulatory Officer of CME Group, Inc. charged non-member Lou Gen He (Lou”) with violating CBOT Rule 534 based on allegations that from November 14, 2018, to April 30, 2019, Lou placed buy and sell orders in the same product and expiration month, where he knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk in the E-mini Dow futures market.

On June 15, 2020, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) entered an order finding that Lou failed to answer the charge issued against him. In failing to answer the charge, the Hearing Panel Chair further ordered that Lou was deemed to have admitted the charge issued and waived his right to a hearing on the merits of the charges.

Pursuant to CBOT Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on June 15, 2020. The Panel found Lou guilty of committing the admitted charge.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered that Lou pay a total fine of $50,000 in connection with this case and companion case CME 19-1127-BC ($25,000 of which is allocated to CBOT). The Panel also suspended Lou 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 Inc. beginning on the effective date below and continuing for a period of two years after the fine is paid in full.

EFFECTIVE DATE:

July 7, 2020