Notice of Disciplinary Action

FILE NO.:                             

CME 12-9117-BC

MEMBER:                           

Susquehanna Government Products, LLLP

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.

FINDINGS:                         

Pursuant to an offer of settlement in which Susquehanna Government Products, LLLP (“SGP”) neither admitted nor denied the rule violation upon which the penalty is based, on March 25, 2014, a Panel of the CME Business Conduct Committee (“Panel”) found that between July 17, 2012, and October 22, 2012, SGP engaged in a pattern of activity in which an automated trading system SGP operated entered Mass Quotes in Lean Hog options with incrementally widening spreads between the bid and offer prices, causing aberrant bid and offer prices to be disseminated to the market. Further, in attempting to correct the issue, SGP enabled a setting that caused SGP to flicker quotes in the Lean Hog and Live Cattle option markets. The testing for this setting did not identify the situation that would result in quote flickering.  The Panel concluded that in so doing, SGP violated CME Rule 432.Q.

PENALTY:                           

In accordance with the settlement offer the Panel ordered Susquehanna Government Products, LLLP to pay a fine of $32,500.

EFFECTIVE DATE:             

March 27, 2014