NOTICE OF DISCIPLINARY ACTION

MEMBER:

Société Générale International Limited

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 Société Générale International Limited 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 Business Conduct Committee (“Panel”) found that on multiple occasions between May 1, 2020, and October 7, 2020, SGIL traders entered orders in Soybean, Chicago Soft Red Winter Wheat, Soybean Oil, Soybean Meal, Corn, Oats, and Kansas City Wheat futures markets through a third-party trading platform for the purpose of filling customer orders upon market open. The SGIL traders used the platform’s synthetic market-on-open 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 Indicative Opening Price. The Panel also found that while the traders were trained on the use of the third-party trading platform and Exchange rules, SGIL 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 SGIL 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 SGIL to pay a $40,000 fine in connection with this case and companion case CME 20-1385-BC ($20,000 of which is allocated to CBOT).