NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:           

Christopher Betz

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 trades or 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 Christopher Betz neither admitted nor denied the rule violations upon which the penalty is based, on June 21, 2021, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on various dates between October 15, 2019, and January 15, 2020, Betz entered buy and sell orders in Soybean, Chicago SRW Wheat, and Corn futures contract markets that matched opposite each other for accounts owned by his employer. Betz entered the opposing orders to lift hedges and offset the net change in the cash positions held by his employer’s grain elevator locations. The Panel further found that Betz 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.

The Panel concluded that Betz thereby violated CBOT Rule 534.

PENALTY:                   

In accordance with the settlement offer, the Panel ordered Betz to pay a fine of $20,000. The Panel also suspended Betz 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 ten (10) business days, beginning on the effective date below and continuing through and including July 7, 2021.

EFFECTIVE DATE:                         

June 23, 2021