NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 11-8411-BC

MEMBER:

ANDREW KIRBY (CAK)
 

CBOT RULE VIOLATIONS:

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.

FINDINGS:

Pursuant to an offer of settlement in which Andrew Kirby neither admitted nor denied the Rule violations upon which the penalty is based, on June 12, 2013, a Panel of the CBOT Business Conduct Committee found that on one or more occasions between January 1, 2010, and January 1, 2011, Kirby executed numerous transactions on the CME Globex® electronic trading platform where there was common beneficial ownership on both sides of the transactions in the Wheat, Soybean, and Soybean Oil futures contracts. The opposing buy and sell orders were placed with the knowledge and intent that the orders would match opposite one another for the purpose of freshening positions. The Panel concluded that in so doing, Kirby violated CBOT Rule 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered Kirby to pay a fine of $25,000. The Panel also suspended Kirby’s membership privileges, access to any CME Group Inc. trading floor, and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. for ten business days, beginning on the effective date below and continuing through and including June 27, 2013.

EFFECTIVE DATE:

June 14, 2013