NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 08-04227-BC

MEMBER:

WESTON HARPER

CME RULE VIOLATIONS:

Rule 432. General Offenses

It shall be an offense:

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

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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 Weston Harper neither admitted nor denied the rule violations upon which the penalty is based, on November 10, 2010, a Panel of the CME Business Conduct Committee found that between July 7 and 8, 2008, Harper bought and sold approximately 13,418 E-Mini S&P 500 futures contracts on the CME Globex electronic trading platform realizing a net loss of approximately $3,955,300, which was far in excess of the $35,000 net capital in his trading account at the beginning of his trading.

The Panel further found that on the morning of July 8, 2008, when confronted by his clearing firm about losses Harper had sustained the day prior, Harper failed to inform his firm of over-night trades he had executed, thereby misrepresenting his overall trading losses. After Harper’s firm allowed him to return to the trading floor for the limited purpose of liquidating his existing short position, Harper liquidated but then established a new short position of 2,600 E-mini S&Ps, which resulted in losses in excess of $1 million. Harper satisfied the debit in his account by July 11, 2008.

The Panel found that in so doing Harper violated CME Rule 432.B. and Rule 432.Q.

PENALTY:

In accordance with the settlement offer, the Panel fined Harper $100,000, and permanently barred him from applying for, owning, or holding a membership of any exchange owned or controlled by CME Group, including the Chicago Mercantile Exchange, the Chicago Board of Trade, the New York Mercantile Exchange, and the Commodity Exchange Inc.; permanently barred Harper from being affiliated with any Member of any exchange owned or controlled by CME Group; and barred Harper from directly or indirectly accessing any CME Group trading floor and electronic trading or clearing platform owned or controlled by CME Group for a period of 10 years, beginning on the effective date below and continuing through and including November 12, 2020. Harper’s indirect access ban will continue until the $100,000 fine is paid in full.

EFFECTIVE DATE:

November 12, 2010