NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 08-02919-BC

MEMBER:

BRIAN MICHEL (BMI)

CBOT RULE VIOLATIONS:

521. PIT TRADING (Legacy)

In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader. Transactions may take place only at the best price available in the open outcry market at the time the trade occurs.

529. Withholding Orders Prohibited

A Member (as defined in Rule 400), or any person entering orders on the Globex® platform, shall not withhold or withdraw from the market any order, or any part of an order, for the benefit of any person other than the person placing the order.

432. T. General Offenses

(It shall be an offense to) Engage in dishonorable or uncommercial conduct.

FINDINGS:

Pursuant to an offer of settlement in which Brian Michel (“Michel”) neither admitted nor denied the rule violations upon which the penalty is based, on June 6, 2012, a Panel of the CBOT Business Conduct Committee found that on November 25, 2008, after Michel received two orders for execution in the Long-Term U.S. Treasury Note Futures (10-Year), Michel failed to competitively execute the orders by failing to trade opposite other members who were interested in portions of the orders. Rather, Michel crossed the orders by executing them as All-or-None. The Panel found that in doing so, Michel violated CBOT Rules 529, 521 and 432.T.

PENALTY:

In accordance with the offer of settlement, the Panel fined Michel $25,000, suspended his membership privileges, access to the trading floor and his direct access to any electronic trading or clearing platform owned or controlled by CME Group 15 business days, and suspended his ability to handle customer orders in a floor broker capacity for 40 business days. The suspensions shall begin on the effective date below.

 

EFFECTIVE DATE:

June 8, 2012