NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 13-9362-BC

MEMBER:

Brian Hospes

CME RULE VIOLATION:

Rule 534. WASH TRADES PROHIBITED

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

FINDINGS:

Pursuant to an offer of settlement in which Brian Hospes (“Hospes”) neither admitted nor denied the rule violations upon which the penalty is based, on April 7, 2014, a Panel of the Chicago Mercantile Exchange Business Conduct Committee found that on two occasions, June 6, 2012 and October 12, 2012, Hospes placed buy and sell orders on the CME Group Inc. Globex electronic trading platform that matched with each other. The Panel found that Hospes knew or should have known the orders would match opposite each other. The Panel found that in doing so, Hospes violated CME Rule 534.

PENALTY:

In accordance with the settlement offer the Panel ordered Hospes to serve a two month suspension from membership privileges on any CME Group Inc. exchange, access to all CME Group Inc. trading floors, and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. The suspension shall run from April 9, 2014, through and including June 8, 2014.

EFFECTIVE DATE:

April 9, 2014