NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 11-08044-BC

NON-MEMBER:

Richard Lee Anderson

CBOT RULE VIOLATIONS:

Rule S39.- PREARRANGED, PRE-NEGOTIATED,AND NONCOMPETITIVE TRADES PROHIBITED (in part)

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

Rule 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 to 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.

Rule 432.- GENERAL OFFENSES

It shall be an offense

C. to engage in dishonest conduct.

(legacy) Rule 432.- GENERAL OFFENSES

It shall be an offense:

G. to act as both buyer and seller in the same transaction.

FINDINGS:

On November 28,2012, a panel of the Chicago Board of Trade {"CBOT") Business Conduct Committee ("BCC") took disciplinary action against Richard Lee Anderson ("Anderson"), a non-member of CME Group Exchanges. On October 16, 2012, a Hearing Panel Chair of the CBOT BCC found that Anderson had failed to file an answer to charges issued against him by a panel of the CBOT Probable Cause Committee. The Hearing Panel Chair accordingly ruled that the charges issued against Anderson were deemed admitted, and through this admission, Anderson had forfeited his right to a hearing on the merits of the charges. Pursuant to CBOT Rule 407 and 408, a penalty hearing was held before a Panel of the CBOT BCC ("Panel") on November 28, 2012, related to these admitted charges. The Panel found Anderson guilty of having committed the admitted charges, which alleged that on October 8, October 19, and November 3, 2010, Anderson knowingly and intentionally executed a total of 20 prearranged wash transactions of Mini Sized Corn futures contracts over the CME Globex electronic trading platform for the purpose of passing $1,828 among several accounts for which he was the sole beneficial owner. The Panel found that in so doing, Anderson violated CBOT Rules 539.A., 534 and (legacy) CBOT Rule 432.G.

The Panel further found that Anderson abandoned three trading accounts in debit status at various firms in violation of CBOT Rule 432.C.
 

PENALTY:

In accordance with its findings, the Panel ordered Anderson be permanently barred from: (1) applying for membership at any exchange owned, controlled, or operated by CME Group Inc., (2) directly or indirectly accessing, placing orders, or executing trades on any trading or clearing platform owned, controlled, or operated by CME Group Inc., including, but not limited to, the CME Globex electronic trading platform; and (3) affiliating with any Member of any CME Group Exchange in connection with business conducted on or subject to Exchange Rules.
 

EFFECTIVE DATE:

November 30, 2012