CME RULE VIOLATIONS:
Rule 529. WITHOLDING ORDERS PROHIBITED
A Member (as defined in Rule 400), or any person entering orders on the Globex platform, shall not withhold or withdraw from the market any order, or any part of an order, for the benefit of any person other than the person placing the order.
Rule 432. GENERAL OFFENSES (in part)
It shall be an offense:
L.2. to fail to fully answer all questions and produce all books and records at such hearing or in connection with any investigations, or to make false statements.
Pursuant to an offer of settlement in which Aaron Benn (“Benn”) neither admitted nor denied the rule violations upon which the penalty is based, on December 23, 2015, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“BCC” or “Panel”) found that Benn was subject to the jurisdiction of the Exchange pursuant to CME Rules 400 and 402, as the conduct occurred while Benn was employed by a CME member. The Panel further found that on more than one occasion between July 9, 2013, and May 7, 2014, Benn, a clerk, withheld portions of customer orders in the Eurodollar options on futures pit for the benefit of obtaining fills on subsequent orders placed by the same customer. Specifically, after a customer entered both buy and sell orders for the same product and strategy, Benn matched the smaller quantity of the opposing buy or sell order opposite the larger buy or sell order for the same product and strategy and communicated only the remaining quantity to the executing brokers. As a result, the full quantity was not executed openly and competitively in the pit. The Panel concluded that by netting and withholding portions of the customer orders, Benn thereby violated CME Rule 529.
Additionally, the Panel found that during an interview in connection with Market Regulation’s investigation, Benn declined to answer substantive questions. Once the matter was subsequently referred to Enforcement, however, Benn voluntarily responded to all substantive questions. The Panel concluded that by failing to answer all questions during Market Regulation’s investigation, Benn thereby violated CME Rule 432.L.2.
In accordance with the settlement offer, the Panel ordered Benn to pay a fine in the amount of $30,000 and serve a 35 business day suspension of access to any CME Group Inc. trading floor and of direct access to all electronic trading and clearing platforms owned or controlled by CME Group, Inc., including CME Globex. The suspension shall run from December 28, 2015, through February 17, 2016, inclusive.
December 28, 2015