NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 09-03984-BC

MEMBER:

TERM COMMODITIES, INC.

CBOT RULE  VIOLATION:

534. WASH TRADES PROHIBITED

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent or negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

432. GENERAL OFFENSES
W.
It shall be an offense for a Member to fail to diligently supervise its
employees and agents in the conduct of their business relating to the
Exchange.

FINDINGS:

Pursuant to an offer of settlement in which Term Commodities Inc. (“Term”) neither admitted nor denied the facts, on February 3, 2011, a panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee found that on four occasions between March 5 and July 9, 2009, an employee of Term placed sizeable, opposing mid market orders on the CME Globex ® platform, with the knowledge and intent that the orders would match opposite one another for accounts owned by the same beneficial owner. In so doing, the panel found that Term Commodities Inc, violated CBOT Rules 534 and 432.W.

PENALTY:

The Panel fined Term $35,000.

EFFECTIVE DATE:

February 7, 2011