NOTICE OF DISCIPLINARY ACTION

MEMBER:

R.J. O’Brien & Associates LLC

CBOT RULE VIOLATIONS:

432. General Offenses (in part)

Q. to commit an act which is detrimental to the interest 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.

433. Strict Liability For The Acts of Agents

Pursuant to Section 2(a)(1)(B) of the Commodity Exchange Act, and not withstanding Rule 432.W., the act, omission, or failure of any official, agent, or other Person acting for any party within the scope of his employment or office shall be deemed the act, omission or failure of the party, as well as of the official, agent or other Person who committed the act.

FINDINGS:

Pursuant to an offer of settlement in which R.J. O’Brien & Associates LLC (“RJO”) neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on August 30, 2022, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on multiple occasions between May 1, 2020, and July 21, 2020, RJO traders entered orders in Corn, Soybean, Soybean Meal, Soybean Oil, KC HRW Wheat, Chicago SRW Wheat, and E-mini Dow futures markets through a third-party trading platform for the purpose of filling customer orders upon market open. The RJO traders used the platform’s synthetic market-on-open order type functionality to fill these orders, and the platform entered and modified crossed-market orders during the pre-open session. These order entries and modifications adversely impacted the IOP. The Panel also found that while the traders were trained to use the third-party trading platform, RJO failed to diligently supervise the processing of orders in the marketplace placed using the trading platform in accordance with Exchange rules.

The Panel concluded that RJO thereby violated CBOT Rule 432.W., and that pursuant to CBOT Rule 433, is strictly liable for the acts of its employees whose conduct violated CBOT Rule 432.Q.

PENALTY:

In accordance with the settlement offer, the Panel ordered RJO to pay a fine in the amount of $20,000.