NOTICE OF DISCIPLINARY ACTION

MEMBER:

Brian Sherman

CBOT RULE VIOLATION:

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 Brian Sherman neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on April 10, 2024, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that from June 17, 2022, through July 15, 2022, Sherman entered orders in July 2022-August 2022, August 2022-September 2022, and September 2022-October 2022 Soybean Oil calendar spreads intending to cancel the orders before execution. Specifically, Sherman entered a small order on one side of the market then entered a large order on the opposite side of the market. Sherman canceled the large order after receiving a fill on the small order. Sherman also entered large orders on one side of the market to move the bid-ask spread. He then hit the bid or lifted the offer before canceling the large order. As a result of this activity, Sherman profited in the amount of $846.

The Panel concluded that as a result of the foregoing, Sherman violated CBOT Rule 575.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Sherman to pay a $15,000 fine, disgorgement of profits in the amount of $846, and serve a 45-business day suspension 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, beginning on the effective date below and continuing through and including trade date June 14, 2024.

EFFECTIVE DATE:

April 12, 2024