NOTICE OF DISCIPLINARY ACTION

MEMBER:

Bradley R. Bauman

CME RULE VIOLATION:

Rule 432. General Offenses

It shall be an offense:

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.

Rule 527.D. Errors and Mishandling of Orders (in part)

If a broker overbuys or oversells for an order, the customer is not entitled to any of the quantity executed in excess of the order quantity. A position that has been established as a result of an erroneous execution or mishandling of an order must be placed in the error account of the broker or firm responsible for the error or order mishandling. Any profits resulting from the liquidation of trades placed in a broker’s or firm’s error account belong to the relevant broker or firm, and any such profits may be retained or disbursed at the broker’s or firm’s discretion.

FINDINGS:

Pursuant to an offer of settlement in which Bradley R. Bauman (“Bauman”) neither admitted nor denied the rule violations and findings upon which the penalty is based, on January 20, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found it had jurisdiction over Bauman pursuant to Rules 400 and 402 as the conduct occurred while he was a CME member. The Panel further found that between April 2012 and October 2012, Bauman recorded numerous trades opposite other market participants with whom a trade was not affected in the Live Cattle futures pit. Bauman then busted the resulting outtrades the following morning. In addition, the Panel found that on December 29, 2011, Bauman improperly resolved an outtrade by placing it in his personal account rather than in an error account. The Panel concluded that Bauman thereby violated CME Rules 432.Q. and 527.D.

PENALTY:

In accordance with the settlement offer, the Panel ordered Bauman to pay a fine of $15,000. The Panel also suspended Bauman for a period beginning on the effective date lasting 10 business days from accessing all CME Group Inc. trading floors, and direct access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. The suspension shall run from January 22, 2015, through and including February 4, 2015.

EFFECTIVE DATE:

January 22, 2015