NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 09-06190-BC

MEMBER:

WILLIAM HENDRICKS (WDOG)

CME RULE VIOLATIONS: 432. GENERAL OFFENSES
D. It shall be an offense to create or report a false or fictitious trade

C. It shall be an offense to engage in dishonest conduct

FINDINGS:

Pursuant to an offer of settlement in which William Hendricks neither admitted nor denied the rule violations upon which the penalty is based, on April 24, 2013, a panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee found that on one or more occasions between January 1, 2009 and September 30, 2009, William Hendricks engaged in a pattern of activity whereby whenever Hendricks ended the trading day either long or short in the Standard and Poor’s 500 Stock Price Index (“S&P 500”) futures, Hendricks would card up a fictitious trade opposite another member with whom he did not trade to flatten out his (Hendricks) position, thus making it appear to his clearing firm that he did not have an open position, thereby allowing Hendricks to avoid receiving a margin call.

Afterwards, during the overnight trading session, Hendricks would enter legitimate orders into Globex to legitimately flatten out his position. The following day, the fictitious trades would generally be busted. The Panel found that in doing so William Hendricks violated CME Rules 432.D and 432.C.

PENALTY:

In accordance with the settlement offer the Panel ordered William Hendricks to pay a fine of $50,000, and to have his membership privileges, access to all CME Group trading floors, and direct access to any electronic trading or clearing platform owned or controlled by CME Group, Inc. suspended for 6 months, starting from the effective date of this Order.

EFFECTIVE DATE:

April 26, 2013