NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 09-03559-BC

MEMBER:

JON WERNER (JEW)
 

CBOT RULE VIOLATIONS:

Rule 539. – PREARRANGED, PRE-NEGOTIATED, AND NONCOMPETITIVE TRADES PROHIBITED (in part)

A. No person shall prearrange or pre-negotiate any purchase or sale or
noncompetitively execute any transaction….

(legacy) Rule 432. – GENERAL OFFENSES

It shall be an offense:

B. to engage in … conduct or proceedings inconsistent with just and equitable principles of trade.

FINDINGS:

Pursuant to an offer of settlement in which Jon Werner (“Werner”) neither admitted nor denied the rule violations upon which the penalty is based, on October 16, 2012, a Panel of the CBOT Business Conduct Committee (the “Panel”) found that on eight (8) occasions from April 27 through June 10, 2009, Jon Werner (“Werner”), a broker in the Wheat futures pit, noncompetitively executed customer orders of Wheat futures opposite two accommodating local traders, without exposing those orders to the market, thus negating market risk and price competition.

The Panel found that in so doing, Werner violated CBOT Rules 539.A. and (legacy) CBOT Rule 432.B.

PENALTY:

In accordance with the settlement offer, the Panel ordered Werner to: (i) pay a fine of $50,000; (ii) serve a suspension for a period beginning on the effective date of the Committee’s decision and lasting four (4) months from the date the fine is paid in full of his 1) membership privileges, 2) access to any CME Group Inc. trading floors, and 3) direct access to all electronic trading and clearing platforms owned or controlled by CME Group, including CME Globex; and (iii) serve a suspension for a period lasting six (6) months from filling brokerage to begin following the conclusion of the four month suspension described in paragraph (ii).

EFFECTIVE DATE:

October 18, 2012