NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 07-02399-BC

MEMBER:

DEAN KAULENTIS

CME RULE VIOLATIONS:

Rule 539.A. Pre-Arranged, Pre-Negotiated and Noncompetitive Trades Prohibited –
General Prohibition

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

Rule 432. General Offenses

It shall be an offense:

B. to engage in fraud, bad faith or in conduct or proceedings inconsistent with just and equitable principles of trade

FINDINGS:

After a full evidentiary hearing on the merits of the case on October 14, 2010, a Panel of the CME Business Conduct Committee (“Panel”) found that on December 4, 2007, Dean Kaulentis recorded a 10-lot trade at a price of 95.95 for his personal trading account opposite a local trader in the Live Cattle futures pit without bidding, offering or otherwise competitively executing the transactions. The Panel concluded that in so doing, Kaulentis violated CME Rule 539.A.

The Panel further found that on the same date Kaulentis endorsed a 10-lot customer order at a price of 95.80 into the same local trader without bidding, offering or otherwise competitively executing the transaction. The Panel concluded that in so doing, Kaulentis violated CME Rule 539.A.

The Panel further found that Kaulentis knowingly created outtrades by putting the 10-lot trade at 95.95 and the 10-lot customer order at 95.80 into the local trader. The Panel concluded that in so doing, Kaulentis violated CME Rule 432.B.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Kaulentis to pay a fine in the amount of $50,000 and suspended his membership privileges, access to the trading floor, and direct access to the CME Globex trading platform for 45 business days, beginning on the effective date below and continuing through and including January 7, 2011.

EFFECTIVE DATE:

November 8, 2010