NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:              

Mark R. Slobodnik

CBOT RULE VIOLATIONS:                  

Rule 432             General Offenses

It shall be an offense:

L.3.        to fail to produce any books or records requested by duly authorized Exchange staff, in the format and medium specified in the request, within 10 days after such request is made or such shorter period of time as determined by the Market Regulation Department in exigent circumstances;

Q.          to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;

S.           to fail to comply with an order of the Board, Exchange staff or any hearing committee;

T.           to engage in dishonorable or uncommercial conduct.

FINDINGS:                         

Pursuant to an offer of settlement in which Mark Slobodnik (“Slobodnik”) neither admitted nor denied the rule violations upon which the penalty is based, on September 3, 2020, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that between April of 2014 and January 4, 2018, Slobodnik, acting as principal and head trader of Blue Guru Trading, LLC (“Blue Guru”), a commodity pool operator, misrepresented himself as a member of the Exchange while soliciting funds from potential investors in Blue Guru. Additionally, despite never having set up an omnibus account, Slobodnik represented to potential investors in Blue Guru that the trades he executed on CME Group markets would be placed into an omnibus account, and profits and losses would be placed into the investors’ accounts on a percentage basis. The Panel further found that Slobodnik deceived Blue Guru investors by sending them fraudulent account statements using the letterhead of its clearing firm to mislead them to believe that their investments in CME Group markets were growing.

Moreover, the Panel found that between November 20, 2014, and February 20, 2015, Slobodnik failed to comply with an order by the Panel in an Exchange disciplinary proceeding (CME 13-9259-BC) fining him $50,000 and barring him access from 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 three months for a violation of CME Legacy Rule 432.G. Specifically, Slobodnik executed numerous trades in various E-mini Dow, Soybean, and Corn futures markets throughout the three month trading suspension.

Lastly, the Panel found that during Market Regulation’s investigation of the matter, Slobodnik failed to provide books and records requested by the Exchange.          

The Panel concluded that Slobodnik thereby violated CBOT Rules 432.L.3., 432.Q., 432.S., and 432.T.

PENALTY:                         

In accordance with the settlement offer, the Panel permanently barred Slobodnik 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, and from having any business affiliation with, being employed by or having a financial or beneficial interest in a member or broker association, beginning on the effective date below.

In imposing this sanction, the Panel considered sanctions imposed against Slobodnik by the U.S. District Court for the Northern District of Illinois stemming from a Complaint filed by the CFTC.

EFFECTIVE DATE:                               

September 8, 2020