NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 07-ETI-99-BC

MEMBER:

JOHN “JACK” NEWHOUSE, JR. (ZWS)

LEGACY CBOT REG. VIOLATION:

9B.14 Good Faith Bids and Offers

A member or Registered User shall not knowingly enter, or cause to be entered, bids or offers into the e-cbot system other than in good faith for the purpose of executing bona fide transactions.

FINDINGS:

Pursuant to an offer of settlement in which John “Jack” Newhouse, Jr. neither admitted nor denied the findings, on March 31, 2010, a Panel of the CBOT Business Conduct Committee found that on four dates in 2007, Newhouse executed a total of five transactions where his personal trading account traded opposite a proprietary trading account for which he was a beneficial owner and the only authorized trader. In each transaction, Newhouse entered buy and sell spread orders with the same quantity and at the same price with less than fifteen seconds separating the placement of the orders. The Panel found that in so doing, Newhouse entered these orders other than in good faith for the purpose of executing bona fide transactions and thereby violated legacy CBOT Regulation 9B.14.

PENALTY:

In accordance with the settlement offer, the Panel fined Newhouse $35,000.

EFFECTIVE DATE:

April 5, 2010