NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 12-8973-BC

NON-MEMBER:

Keith J. Segal

CBOT RULE VIOLATIONS:

Rule 432, General Offenses (in part)

It shall be an offense:

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;

L. 3. to fail to produce any books or records requested by duly authorized Exchange staff, in the format and medium specified in the request, within 10 days after such request is made…

Rule 532, Disclosing Orders Prohibited (in part)

No person shall disclose another person's order to buy or sell except to a designated Exchange official or the CFTC.… An order for pit execution is not considered public until it has been bid or offered by open outcry. No person shall take action or direct another to take action based on non-public order information, however acquired.

FINDINGS:

On March 4, 2014, in accordance with Chicago Board of Trade (“CBOT”) Rule 407.C., a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) found that Keith J. Segal had failed to answer charges issued against him by the CBOT Probable Cause Committee. The Hearing Panel Chair accordingly ruled that the charges issued were deemed admitted, and through this admission, Segal had forfeited his right to a hearing on the merits of the charges.

On March 25, 2014, a penalty hearing was held before a Panel of the CBOT BCC related to these admitted charges. The Panel found that Segal, as an employee of a member at the time of the conduct, was subject to the BCC’s jurisdiction pursuant to CBOT Rules 400 and 402, and further found Segal guilty of twice disclosing nonpublic order information in 2012, failing to appear at his scheduled interview before Exchange staff, and failing to produce records requested by the Exchange. The Panel found that in so doing, Segal violated CBOT Rules 532, 432.L.1, and 432.L.3.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel fined Segal $25,000 and ordered that he be barred for a period of five years from the date his fine is paid in full from (1) applying for membership at any CME Group exchange; (2) direct or indirect access and use of any trading floor, electronic trading or clearing platform owned or operated by any CME Group exchange; and (3) affiliation with, employment by, or association with a broker association, guaranteed introducing broker, Member or affiliate of a Member registered with any CME Group exchange, trading platform or clearing platform.

EFFECTIVE DATE:

April 28, 2014