NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 10-04951-BC

MEMBER:

JAMES SCHULZE (JLS)

CBOT RULE VIOLATION:

Rule 539. Prearranged, Pre-negotiated and Noncompetitive Trades Prohibited

A. General Prohibition

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

FINDINGS:

Pursuant to an offer of settlement in which James Schulze neither admitted nor denied the rule violations upon which the penalty is based, on December 13, 2011, a Panel of the CBOT Business Conduct Committee found that on May 26, 2010, Schulze engaged in a pre-arranged trade involving the 2010 June-September 2-Year Treasury Note futures spreads with tails. The Panel concluded that in so doing, Schulze violated CBOT Rule 539.A.

PENALTY:

In accordance with the settlement offer, the Panel fined Schulze $10,000 and suspended his membership privileges, direct access to any trading floor, or electronic trading or clearing platform owned or controlled by CME Group for 15 business days beginning on December 15, 2011, through and including January 6, 2012.

EFFECTIVE DATE:

December 15, 2011