NOTICE OF DISCIPLINARY ACTION

MEMBER:

Wayne Friedman

CME RULE VIOLATIONS:

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.

Rule 539 Prearranged, Pre-negotiated and Noncompetitive Trades Prohibited (in part)

A. General Prohibition – No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction, except in accordance with Sections B. and C. below.

FINDINGS:

Pursuant to an offer of settlement in which Wayne Friedman (“Friedman”) neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that Friedman was subject to the jurisdiction of the Exchange pursuant to Rules 400 and 402, as the conduct occurred while Friedman was a CME member. The Panel further found that on April 9, 2013, Friedman executed a portion of customer orders that was not bid openly and competitively in the pit. Specifically, a customer entered orders to buy 6,500 contracts and sell 12,500 contracts for a spread trade in the Eurodollar options on futures pit. Friedman executed 6,500 contracts opposite another broker from his group in the pit without either openly bidding or offering in the pit. Subsequently, the same customer entered orders for an additional 10,000 contracts on the buy side and 5,000 contracts on the sell side. Friedman executed 2,000 contracts opposite another broker from his group in the pit without either openly bidding or offering in the pit. The Panel concluded that Friedman thereby violated CME Rules 521 and 539.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Wayne Friedman to pay a fine to the Exchange in the amount of $15,000 and serve a twenty-five business day suspension of access to any CME Group Inc. trading floor and of direct access to any electronic trading and clearing platform owned or operated by CME Group Inc., including CME Globex. The suspension shall run from March 23, 2015, through April 24, 2015, inclusive.

EFFECTIVE DATE:

March 23, 2015