NOTICE OF DISCIPLINARY ACTION

MEMBER:

James Groth

CBOT RULE VIOLATIONS:

Rule 432. General Offenses (in part)

It shall be an offense:

B.2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;

Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;

FINDINGS:

Pursuant to an offer of settlement in which James Groth (“Groth”) neither admitted nor denied the rule violations upon which the penalty is based, on July 16, 2015, a Panel of the CBOT Business Conduct Committee (“Panel”) found that it had jurisdiction over Groth pursuant to CBOT Rules 400 and 402 as the conduct occurred while Groth was a CBOT member. The Panel also found that during the time period from May 2011 through October 2011, Groth, on multiple occasions, entered large orders in the Ultra T-Bond, Thirty Year Bond, 10-Year Note, and 5-Year Note futures contract markets without the intent to trade. The Panel specifically found a pattern of activity on Globex in which Groth placed a smaller order to sell (buy) on the CME Globex electronic trading platform (“Globex”). Groth subsequently entered multiple large-lot buy (sell) orders at or near the best bid (offer) on Globex, thus creating the appearance of an imbalance in buy/sell pressure. Once the smaller order began trading, Groth canceled the large orders. The Panel found that Groth entered these large orders for the purpose of inducing other market participants to trade opposite his smaller resting orders. The Panel concluded that Groth thereby violated CBOT Rules 432.B.2. and 432.Q.

PENALTY:

In accordance with the settlement offer, the Panel ordered Groth to pay a fine to the Exchange in the amount of $55,000 and serve a 10 business day suspension of access to any CME Group Inc. trading floor and of direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including CME Globex. The suspension shall run from July 20, 2015, through July 31, 2015, inclusive.

EFFECTIVE DATE:

July 20, 2015