NOTICE OF DISCIPLINARY ACTION

MEMBER:

The Andersons Inc.

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 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.

FINDINGS:

Pursuant to an offer of settlement in which The Andersons Inc. (“TAI”) neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on December 7, 2023, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on multiple occasions between January 1, 2021, and January 31, 2022, a trader employed by TAI entered buy and sell orders in various KC HRW Wheat, Wheat, Soybean, and Corn futures contracts that matched between two accounts with common beneficial ownership, or in the same account. The Panel also found that, although TAI’s trader intended to place limit orders followed by stop limit orders, he instead placed resting orders on one side of the market followed by limit orders at or through his resting order’s price. The trader reasonably should have known that entering orders in this manner would produce a wash result. The Panel concluded that TAI therefore violated CBOT Rule 534.

On March 2, 2021, TAI was on notice that its trader engaged in wash trades. Despite the notice, the activity continued to occur occasionally through January 31, 2022. Therefore, the Panel also found that TAI failed to diligently supervise its employee in violation of CBOT Rule 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered TAI to pay a $30,000 fine.