NOTICE OF DISCIPLINARY ACTION

MEMBER:                        

Barry Scher

CME 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:                         

Pursuant to an offer of settlement in which Barry Scher (“Scher”) neither admitted nor denied the rule violation upon which the penalty is based, on September 24, 2020, 2020, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on certain days between October 8, 2018, and October 19, 2018, Scher directed a clerk on the trading floor to enter buy and sell orders in October 2018 Live Cattle futures contracts for accounts with common beneficial ownership. Scher directed the entry of the opposing orders for the purpose of freshening long futures position dates for customers. The opposing orders ended up trading opposite each other. The Panel found that Scher knew or reasonably should have known that the orders would match and avoid taking a bona fide market position. The Panel concluded that Scher thereby violated CME Rule 534.

PENALTY:                         

In accordance with the settlement offer, the Panel ordered Scher to pay a fine of $15,000. The Panel also suspended Scher 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 five business days, beginning on the effective date below and continuing through and including October 2, 2020.

EFFECTIVE DATE:                             

September 28, 2020