NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Michael Jang

CBOT RULE VIOLATIONS:

CBOT 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.

D. No Person shall enter or cause to be entered an actionable or non-actionable message with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

CBOT Market Regulation Advisory Notice, Advisory Number RA2006-5 (in part)

Question 22: Is the creation and execution of User Defined Spreads (“UDS”) for the purposes of deceiving or disadvantaging other market participants a violation of Rule 575?

Answer 22: Yes. Although the CME Globex system provides certain protections such as reasonability checks with respect to option deltas and the futures price on covered instruments, the UDS functionality requires users to exercise diligence and care in the creation of option spread instruments, including the creation of covered option strategies.

Market participants are reminded that knowingly creating and/ or trading UDS instruments in a manner intended to deceive or unfairly disadvantage other market participants is considered a violation of Rule 575.

CBOT Rule 576 Identification of Globex Terminal Operators

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.

FINDINGS:

Pursuant to an offer of settlement in which Michael Jang neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on March 22, 2023, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on numerous occasions from April 14, 2021, to April 30, 2021, Jang, Edgehog’s chief executive officer, and an Edgehog employee, at Jang’s direction, created and executed trades in covered User Defined Spreads (“UDS”) in various Soybean, Soybean Oil, Soybean Meal, Corn and Wheat futures contracts on the Globex electronic trading platform to receive beneficial over-allocations or under-allocations of futures contracts associated with the covered options instrument. Additionally, the Panel found that Jang allowed another individual to use his operator ID to access Globex and enter orders.

The Panel concluded that as a result of the foregoing, Jang violated CBOT Rules 575.D. and 576.

PENALTY:

In accordance with the settlement offer, the Panel ordered Jang to pay a fine of $25,000 and suspended Jang from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group for 15-business days, beginning on the effective date below, and continuing through and including April 14, 2023.

EFFECTIVE DATE:

March 24, 2023