NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 08-02483-MS-BC
 

MEMBER:

WILLIAM JOHN FORSTER

CBOT RULE VIOLATIONS:

Rule 432.Q. General Offenses – Acts Detrimental

It shall be an offense to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange.

Rule 432.T. General Offenses – Dishonorable or Uncommercial Conduct

It shall be an offense to engage in dishonorable or uncommercial conduct.

FINDINGS:

Pursuant to an offer of settlement in which William John Forster neither admitted nor denied the rule violations upon which the penalty is based, on July 29, 2010, a Panel of the CBOT Business Conduct Committee found that on Friday, September 12, 2008, Forster held a short September 2008 Soybean futures position beyond the contract’s expiration with no reasonable means to satisfy the delivery obligations that arose from the short position. At the time, the supply of soybeans in the cash market was tight due to environmental factors known to Forster. The Panel further found that Forster had made several representations to his clearing firm that he would liquidate his position prior to the contract’s expiration, which Forster failed to adhere to. The Panel found that in so doing Forster violated CBOT Rule 432.Q. and Rule 432.T.

PENALTY:

In accordance with the settlement offer, the Panel fined Forster $100,000 and suspended his membership privileges, including his access to any CME Group trading floor and direct access to any CME Group electronic trading or clearing platform, for 20 business days, beginning August 9, 2010, and continuing through September 3, 2010, inclusive.

EFFECTIVE DATE:

August 9, 2010