NOTICE OF DISCIPLINARY ACTION

MEMBER:

WEDBUSH SECURITIES, INC.

CME RULES:

432. General Offenses (In Part)

It shall be an offense:

L.3. to fail to produce any books or records requested by duly authorized Exchange staff, in the format and medium specified in the request, within 10 days after such request is made or such shorter period of time as determined by the Market Regulation Department in exigent circumstances.

561. Submission of Large Trader Positions And Volume Threshold Accounts (In Part)

561.A. Large Trader Reporting

Clearing members, omnibus accounts and foreign brokers shall electronically submit to the Exchange a daily large trader position report of all positions required to be reported as set forth in the Position Limit, Position Accountability and Reportable Level Table, in the Interpretations Section at the end of Chapter 5. Positions at or above the reportable level in a particular expiration month of a futures contract, or in all puts or in all calls of a particular option contract expiration month, are required to be reported. For an account with reportable positions in a particular contract, all positions, regardless of size, in any contract month and in any contract that aggregates with that contract must be reported.

811. Position Change Data

Position change data must be submitted to the Clearing House each trading day not later than the time specified by the Clearing House. Position change data will be in such form and contain such information as prescribed by the Clearing House. When requested, the identification of accounts will be made available to the Financial and Regulatory Surveillance Department.

FINDINGS:

Pursuant to an offer of settlement, in which Wedbush Securities Inc. neither admitted or denied the Rule violations or factual findings upon which the penalty is based, on November 15, 2023, a Panel of the CME Business Conduct Committee (“Panel”) found that on February 24, 2022, Wedbush’s back-office accounting platform failed to maintain records of cleared trades after its settlement platform reached an upper limit of traded contracts due to extremely high trading volume. As a result, from that date through March 2022, Wedbush: (1) submitted inaccurate large trader position reports to the Exchange; and (2) failed to submit position change data to the Clearing House in a timely manner.

These inaccurate and untimely reports included positions in various contract months of Live Cattle futures and options on futures (“F&O”), Feeder Cattle F&O, Australian Dollar futures, Brazilian Real futures, Bitcoin F&O, Canadian Dollar futures, One-Year and Three-Year Mid-Curve Eurodollar options, E-mini Euro FX futures, Euro FX futures, Eurodollar F&O, E-mini S&P 500 Index F&O, E-mini S&P 500 Index end-of-month and weekly options, Ether futures, Micro E-mini S&P 500 Index weekly options, Japanese Yen futures, Lumber F&O, Lean Hog F&O, Micro E-mini Russell 2000 Index futures, Micro Australian Dollar/U.S. Dollar futures, Micro British Pound/U.S. Dollar futures, Micro Euro/U.S. Dollar futures, Micro Bitcoin futures, Micro Canadian Dollar/U.S. Dollar futures, Micro E- mini S&P 500 Index F&O, Micro Ether futures, Micro Japanese Yen/U.S. Dollar futures, Micro E-mini Nasdaq-100 Index F&O, Mexican Peso futures, Micro E- mini Nasdaq-100 end-of-month and weekly options, Yen Denominated Nikkei Stock Average futures, New Zealand Dollar futures, Nikkei Stock Average futures, E-mini Nasdaq-100 F&O, E-mini Nasdaq-100 end-of-month and weekly options, E-mini Russell 2000 weekly options, South African Rand futures, Euro/British Pound futures, E-mini Russell 2000 Index futures, Russian Ruble futures, S&P 500 Annual Dividend Index futures, and One-Month and Three- Month SOFR futures.

The Panel also found that on multiple occasions from March 2022 to April 2022, Wedbush failed to respond to requests from duly authorized Exchange staff for information pertaining to position data in a timely manner.

The Panel found that as a result of the foregoing, Wedbush violated CME Rules 561, 811, and 432.L.3.

PENALTY:

In accordance with the settlement offer, the Panel ordered Wedbush to pay a fine in the amount of $175,000 in connection with this case and companion cases NYMEX 22-1591-BC, COMEX 22-1591-BC, and CBOT 22-1591-BC ($40,000 allocated to CME).