NOTICE OF DISCIPLINARY ACTION

MEMBER:

Tanius Technology LLC

CBOT RULE VIOLATIONS:

Rule 432. General Offenses (in part)

It shall be an offense:

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

Rule 576 Identification of Globex Terminal Operators

Each Globex Terminal Operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If operator IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique operator ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using an operator ID other than the individual’s own unique operator ID.

Rule 575 Disruptive Practices Prohibited (in part)

All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.

A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

FINDINGS:

Pursuant to an offer of settlement in which Tanius Technology LLC neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, on September 22, 2022, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that between October 30, 2020, and June 1, 2021, Tanius did not adequately manage the operator IDs that certain of its employees used to execute trades, including failing to keep accurate record of the operator IDs that certain of its employees used when entering orders, providing inconsistent information to the Exchange regarding the operator IDs its employees traded through, and permitting multiple employees to enter orders using the same operator ID. Additionally, the Panel found that during the same time period, a Tanius trader entered orders with the intent, at the time of order entry, to cancel the orders before execution or to modify the orders to avoid execution in the December 2020 Ultra 30-Year Treasury Bond, March 2021 Ultra 30-Year Treasury Bond, June 2021 Ultra 30-Year Treasury Bond, June 2021 Ultra 10-Year Treasury Note, and September 2021 Ultra 10-Year Treasury Note futures markets. The Panel also found that Tanius failed to diligently supervise trading by such employees despite receiving comments from the Exchange regarding possible disruptive trading activity and not taking sufficient steps to address the activity. The Panel concluded that Tanius thereby violated CBOT Rules 432.W., 576, and 575.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Tanius to pay a $150,000 fine in connection with this case and companion cases CME 21-1449-BC and COMEX 21-1449-BC ($100,000 of which is allocated to CBOT).