NOTICE OF DISCIPLINARY ACTION

MEMBER:

Mark S. Arenson

CBOT RULE VIOLATIONS:

Rule 521. Requirements for Open Outcry Trades (in part)

In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader. Transactions may take place only at the best price available in the open outcry market at the time the trade occurs.

Rule 539. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited (in part)

A. General Prohibition

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

FINDINGS:

Pursuant to an offer of settlement in which Mark S. Arenson (“Arenson”) neither admitted nor denied the rule violations upon which the penalty is based, on July 27, 2016, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that it had jurisdiction over Arenson pursuant to rules 400 and 402 as the conduct occurred while Arenson was a CBOT Member. The Panel further found that on January 6, 2015, while in the 10-Year Treasury Note Options on Futures pit, Arenson non-competitively traded 1,000 contracts opposite another broker within the same brokerage group without bidding his order in a manner consistent with open and competitive trades. Specifically, the Panel found that after Arenson openly bid for and traded 900 contracts opposite the other broker, he received instructions to sell another 1,000 contracts, and then told the other broker that they traded 1,900, rather than 900, contracts. The Panel concluded that as a result Arenson violated CBOT Rules 521 and 539.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Arenson to pay a fine in the amount of $10,000, and to have his access to all CME Group trading floors and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group suspended for a period of 15 business days. The suspension shall run from July 29, 2016, through August 18, 2016, inclusively.

EFFECTIVE DATE:

July 29, 2016