NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 09-03644-BC
 

MEMBER FIRM:

EAGLE MARKET MAKERS INC.,

CBOT RULE VIOLATION:

Rule 443. Position Limit Violations (legacy)

The Market Regulation Department and the BCC shall have the authority to enforce the position limit rules of the Exchange. For purposes of this rule, any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations. Additionally, any person making a bid or offer that would, if accepted, cause such a person to exceed the applicable position limits shall be in violation of this rule.

Rule 854. Concurrent Long and Short Positions

Set forth below are the procedures that must be followed for concurrent long and short positions and hold-open accounts.

D. The Exchange takes no position regarding the internal bookkeeping procedures of its clearing members which for the convenience of a customer, may “hold open” a position only on their books. However, the clearing member must accurately report to the Exchange and the Clearing House, as appropriate, large trader positions, long positions eligible for delivery and open interest.

FINDINGS:

Pursuant to an offer of settlement in which Eagle Market Makers Inc., neither admitted nor denied the rule violation upon which the penalty is based, on June 5, 2013, a Panel of the CBOT Business Conduct Committee found that on April 29, 2009, Eagle traders exceeded the applicable position limit in Corn futures by 278 contracts or 46%. In addition, the Panel found that from April 28 through April 30, 2009, Eagle reported inaccurate position and open interest information to the Exchange. Specifically, Eagle misreported open interest by 21 contracts or .14% on April 30, 2009. The Panel found that in so doing, Eagle violated legacy CBOT Rule 443 and CBOT Rule 854.D.

PENALTY:

In accordance with the settlement offer, the Panel ordered Eagle to cease and desist from the conduct that violated legacy CBOT Rule 443 and ordered Eagle to pay a fine of $2,000 for the misreporting of position and open interest information in its data submissions to the exchange. In levying the penalty, the panel considered the CFTC’s corresponding action and sanction consisting of a $220,000 fine for the activity involving Eagle.
 

EFFECTIVE DATE:

June 11, 2013