NOTICE OF DISCIPLINARY ACTION

MEMBER:

Steven Daniel Peake

CME RULE VIOLATION:

Rule 521. Requirements for Open Outcry Trades (in part)

In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader. Transactions may take place only at the best price available in the open outcry market at the time the trade occurs.
539. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited (in part)

A. No person shall prearrange or pre-negotiate any purchase or sale or
noncompetitively execute any transaction…

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.

FINDINGS:

Pursuant to an offer of settlement in which Steven Daniel Peake (“Peake”) neither admitted nor denied the rule violations upon which the penalty is based, on February 25, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that it had jurisdiction over Peake pursuant to Rules 400 and 402 as the conduct occurred while Peake was a CME member. The Panel also found that on February 22, 2013, Peake executed a portion of a customer order that was not bid openly and competitively in the pit in accordance with CME Rules. Specifically, after receiving instructions to sell put spreads in the Eurodollar options on futures pit, Peake directed the sale of a portion of the order opposite another broker without offering it to the pit. Further, upon overselling the order by 500 put spreads, Peake asked the market participants to whom he sold to reduce their executed quantity rather than place the 500-lot short position into his own error account. The Panel concluded that Peake thereby violated CME Rules 521, 527.D., and 539.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Peake to pay a fine of $15,000. The Panel also suspended Peake from accessing any CME Group Inc. trading floor, and from direct access to all electronic trading and clearing platforms owned or controlled by CME Group for 20 business days, beginning on February 27, 2015, and continuing through and including March 26, 2015.

EFFECTIVE DATE:

February 27, 2015