NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 11-8392-BC

NON-MEMBER:

Alexsey Bazhenov

CBOT RULE VIOLATIONS:

Rule 432 (“General Offenses”) (in part):

It shall be an offense:
B. (1) to engage in fraud or bad faith; (2) to engage in conduct or proceedings inconsistent with just and equitable principles of trade;

C. to engage in dishonest conduct;

G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts;

L. (1) to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

FINDINGS:

On April 3, 2014, a Panel of the Chicago Board of Trade (“CBOT”) Probable Cause Committee (“PCC”) charged non-member Alexsey Bazhenov (“Bazhenov”) with violating CBOT Rules 432.B.1., 432.B.2., 432.C., 432.G., and 432.L., based on allegations that on December 15, 2010, Bazhenov orchestrated and prearranged trades in the June 2011 30-Year Bond futures contract opposite another non-member’s account, which resulted in the transfer of $31,218.75 to his account from the other non-member account, and that Bazhenov failed to appear at a scheduled interview with Market Regulation in connection with the investigation into these transactions.

On September 25, 2014, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) entered an order finding that Bazhenov failed to answer the charges issued against him. In failing to answer the charges, the Hearing Panel Chair further ordered that Bazhenov was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.
Pursuant to CBOT Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on October 9, 2014. The Panel found Bazhenov guilty of committing the admitted charges.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel barred Bazhenov permanently from (1) membership and privileges at any CME Group Exchange, (2) direct or indirect access and use of any CME Group trading floor, electronic trading platform or clearing platform owned or operated by any CME Group exchange, and (3) affiliation with, employment by, or association with a Member (as this term is defined in Rule 400) or affiliate of a Member of any CME Group exchange.

EFFECTIVE DATE:

November 11, 2014