NOTICE OF DISCIPLINARY ACTION

MEMBER:

Marquette Trading Partners LP

CME RULE VIOLATIONS:

Rule 432. General Offenses

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.

W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

FINDINGS:

Pursuant to an offer of settlement in which Marquette Trading Partners LP (“Marquette”) neither admitted nor denied the rule violations upon which the penalty is based, on June 21, 2021, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on October 22, 2019, Marquette deployed an untested automated trading system (“ATS”) in the December 2019 Lean Hogs futures market. Specifically, the ATS entered continuous 10-lot orders after the market reached limit-up during the pre-open period, resulting in significant market imbalance of which Marquette’s orders represented a large percentage of the publicly displayed contracts resting at this time. Instead of deactivating the ATS, Marquette manually cancelled a small percentage of the initial orders entered. As a result, until Marquette manually shut down the ATS, it re-entered identical orders as those previously cancelled. The Panel further found that although Marquette had a policy requiring testing of the ATS prior to deployment, Marquette failed to perform such tests or simulation and failed to implement controls prior to deploying this ATS in the market on the date in question. Once deployed, Marquette also failed to properly monitor the ATS.
The Panel concluded that Marquette thereby violated CME Rules 432.Q and 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered Marquette to pay a fine of $35,000.

EFFECTIVE DATE:

June 23, 2021