NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Melissa Wilkey

CME RULE VIOLATIONS:

Rule 432. General Offenses

It shall be an offense:

G. To prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.

Rule 532. Disclosing Orders Prohibited

With the exception of transactions executed in accordance with the requirements of Rules 526, 538, 539 and 549, no person shall disclose another person’s order to buy or sell except to a designated Exchange official or the CFTC, and no person shall solicit or induce another person to disclose order information. No person shall take action or direct another to take action based on non-public order information, however acquired.

FINDINGS:

On March 24, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Probable Cause Committee (“PCC”) charged non-member Melissa Wilkey (“Wilkey”) with violating CME Rules 432.G. and 532 based on allegations that on multiple occasions between December 2012 and April 2013, Wilkey executed numerous noncompetitive transactions over the CME Globex electronic trading platform in Feeder Cattle futures between her account and seven accounts controlled by her husband Aaron Wilkey for the purpose of transferring equity from seven accounts to her account. Specifically, Wilkey transferred $23,000 via round turn transactions opposite the accounts controlled by her husband. Wilkey also transferred an additional $40,925 by initiating trades in the open market and offsetting them opposite an account controlled by her husband.

On August 10, 2015, and in accordance with Rule 407.C., a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) found that Wilkey had failed to answer the charges issued against her by the CME PCC. The Hearing Panel Chair accordingly ruled that the charges issued were deemed admitted, and through this admission Wilkey had waived her right to a hearing on the merits of the charges.

On November 2, 2015, a Panel of the CME BCC found that Wilkey committed the violations contained in the admitted charges, and subsequently held a penalty hearing.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered that Wilkey be barred permanently from (1) applying for membership at any CME Group exchange; (2) direct or indirect access and use of any trading floor, electronic trading platform or clearing platform owned or operated by any CME Group exchange; and (3) affiliation with, employment by, or association with a Member (as this term is defined in Rule 400) or affiliate of a Member of any CME Group exchange. The Panel further ordered Wilkey to pay a fine of $100,000 and ordered her and Aaron Wilkey, jointly and severally, to pay $23,000 in restitution $40,925 in disgorgement.

EFFECTIVE DATE:  

March 1, 2016