NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Jooyeon Choi

CBOT RULE VIOLATIONS:

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.

B. No person shall enter or cause to be entered an actionable or non-actionable message(s) with intent to mislead other market participants.

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 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.

Rule 432 General Offenses (in part)

It shall be an offense:

L.1. to fail to appear before the Board, Exchange staff or any investigation or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

FINDINGS:

On February 17, 2022, and as amended on April 4, 2022, the Chief Regulatory Officer issued charges against Jooyeon Choi for violating CBOT Rules 575.B., 534., and 432.L.1. based on allegations that between April 26, 2020, through March 3, 2021, Choi entered actionable messages in various Ultra U.S. Treasury Bond, Chicago SRW Wheat, Corn, Soybean, Soybean Meal, and Soybean Oil futures with the intent to mislead other market participants and receive favorable pricing. Choi layered orders of various quantities and prices on both sides of the market. She modified those orders to create a disproportionate quantity of contracts on one side of the market at the top levels of the order book. The imbalance induced market participants to trade into her orders for smaller quantities she entered or modified on the opposite side of the market. Choi exhibited a pattern of order entry and modification that alternated between creating buy-side pressure and sell-side pressure in order to induce market participants to trade into her smaller resting quantity on the opposite side of the market. Similarly, if a market participant improved the bid or offer after being misled by the market imbalance she created, Choi aggressively traded into the improved price.

Additionally, between May 26, 2020, and January 15, 2021, Choi entered matching buy and sell orders in January 2021 Soybean, March 2021 Soybean, December 2020 Soybean Meal and March 2021 Soybean Meal futures for accounts with common beneficial ownership. Choi knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to risk. The Panel further found that Choi failed to appear at an interview scheduled with Market Regulation staff on April 28, 2021.

On December 21, 2022, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) found that Choi failed to submit a written answer to the charges issued against her and that Choi was deemed to have admitted the charges. Choi therefore waived her right to a hearing on the merits of the charges.

Pursuant to CBOT Rule 408.F., a BCC Panel found Choi guilty of committing the admitted charges and held a penalty hearing thereafter.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered that Choi pay a $120,000 fine in connection with this case and companion cases NYMEX 20-1359-BC and COMEX 20-1359-BC ($40,000 of which is allocated to CBOT). The Panel also permanently suspended Choi from direct access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivates clearing organization, or swap execution facility owned or controlled by CME Group beginning on the effective date below.

EFFECTIVE DATE:

January 11, 2023