NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 10-7944-BC

MEMBER:

Michael J. Verdonck (ZEG)

CBOT RULE VIOLATIONS:

Rule 562. Position Limit Violations (in part)

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 10102.E. Position Limits (Corn Futures) (in part)

In accordance with Rule 559, Position Limits and Exemptions, no person shall own or control positions in excess of:

1. 600 contracts net long or net short in the spot month.

FINDINGS:

Pursuant to an offer of settlement in which Michael J. Verdonck neither admitted nor denied the rule violations upon which the penalty is based, on August 16, 2012, a Panel of the CBOT Business Conduct Committee found that on November 30, 2010, Verdonck failed to adhere to the spot month speculative position limit for Corn futures by entering an order to purchase 2,500 December – March Corn futures spreads. At this time, Verdonck had already established a long December Corn futures position of 134 contracts. This offer, if accepted, would have caused Verdonck to exceed the spot month speculative position limit of 600 contracts by 2,034 contracts. The Panel found that in so doing, Verdonck violated CBOT Rule 562 (Position Limit Violations) and CBOT Rule 10102.E (Corn Futures, Position Limits).

PENALTY:

In accordance with the settlement offer, the Panel fined Verdonck $5,000 and suspended his membership privileges, access to any CME Group trading floors, and direct access to any CME Group electronic trading or clearing platform for 20 business days.

EFFECTIVE DATE:

August 20, 2012