NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 09-04113-BC

MEMBER:

SCOTT BRADY

CBOT RULE VIOLATION:

Rule 432. (General Offenses) (in part)

It shall be an offense:

T. to engage in uncommercial conduct

FINDINGS:

Pursuant to an offer of settlement in which Scott Brady (“Brady”) neither admitted nor denied the rule violation upon which the penalty is based, on January 27, 2012, a Panel of the CBOT Business Conduct Committee found that on September 16, 2009, while employed as a trader for a member firm of the Exchange, Brady executed trades in the user defined December 2009 10-Year U.S. Treasury Note 119 Call – 115 Put risk reversal covered against futures at a price of 117.00½ on the CME Globex electronic trading platform wherein he entered individual 1-lot orders against the covered risk reversal so as to receive an over-allocation of short futures at a price of 117.00½, when the prevailing futures market was approximately 116.26 ½ bid, offered at 116.27. Brady subsequently agreed to transfer the over-allocated futures back to the counter-party. The Panel found that in entering the 1-lot orders in such a manner, Brady violated CBOT Rule 432.T. (To Engage in Uncommercial Conduct).

PENALTY:

In accordance with the settlement offer and in consideration of evidence that there were no discernable profits realized by Brady in executing these trades as the Exchange reversed the over-allocated futures, the Panel fined Brady $20,000.
 

EFFECTIVE DATE:

January 31, 2012