NOTICE OF DISCIPLINARY ACTION

MEMBER:

Bisher Khalaf

CME RULE VIOLATIONS:

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 Bisher Khalaf (“Khalaf”) neither admitted nor denied the rule violations upon which the penalty is based, on April 15, 2015, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that it had jurisdiction over Khalaf pursuant to CME Rules 400 and 402 as the conduct occurred while Khalaf was a CME member. The Panel further found that between March 26, 2012, and April 3, 2013, Khalaf executed numerous wash trades on Globex totaling 804 E-mini S&P 500 futures and E-mini NASDAQ-100 futures contracts. The opposing buy and sell orders were placed by Khalaf for the purpose of transferring positions from one account to another, and Khalaf reasonably should have known that the orders would trade opposite each other. The Panel concluded that Khalaf thereby violated CME Rule 534.

PENALTY:

In accordance with the settlement offer and after taking Khalaf’s financial condition into consideration when it levied the sanction, the Panel ordered Khalaf to pay a fine of $10,000, and to have his access to all CME Group trading floors and direct access to all electronic trading and clearing platforms owned or controlled by CME Group suspended for two months, beginning on the effective date below and continuing through and including June 17, 2015.

EFFECTIVE DATE:

April 17, 2015