NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:              

BURR JENNINGS

RULE VIOLATION:          

EXCHANGE 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 June 26, 2019, a Panel of the Commodity Exchange (“COMEX”) Probable Cause Committee (the “PCC Panel”) charged Burr Jennings (“Jennings”) with violating Exchange Rule 534 based on allegations that on various occasions,  between April 2017 and October 2017, Jennings entered numerous buy and sell orders in various E-micro Gold futures contracts for accounts controlled by Jennings, of Jennings Capital Management (“Jennings Capital” or the “Firm”), with the intention that the orders trade opposite each other to avoid taking a bona fide position exposed to market risk.

On September 25, 2019, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) entered an order finding that Jennings failed to answer the charge against him. The Hearing Panel Chair further ordered that Jennings was deemed to have admitted the charge issued and waived his right to a hearing on the merits of the charge.

Pursuant to Exchange Rule 407.C., a sanctions hearing was held before a Panel of the BCC (“Panel”) on April 29, 2020. The Panel found that Jennings had committed a violation of Exchange Rule 534 and imposed sanctions on Jennings.

Jennings appealed the Panel’s Order and a hearing was held before an Appellate Panel on October 29, 2020. On December 11, 2020, the Appellate Panel affirmed the Panel’s decision that Jennings had violated Exchange Rule 534 and ordered that Jennings pay a monetary fine in the amount of $30,000 and serve a six month suspension from access to any trading floor owned or controlled by CME Group and from direct or indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group. The suspension shall run from December 28, 2020 through, and including, June 28, 2021.

PENALTY:                         

In accordance with Exchange Rule 411, the Appellate Panel ordered that Jennings pay a monetary fine in the amount of $30,000 and serve a six month suspension from access to any trading floor owned or controlled by CME Group and from direct or indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled
by CME Group. The suspension shall run from December 28, 2020 through, and including, June 28, 2021.

EFFECTIVE DATE:           

December 28, 2020