NOTICE OF DISCIPLINARY ACTION

MEMBER:

JB Drax Honoré Inc.

CME RULE VIOLATIONS:

Rule 432 General Offenses (in part)

It shall be an offense:

W. For any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

FINDINGS:

Pursuant to an offer of settlement in which JB Drax Honoré Inc. (“JB Drax”) neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the CME Business Conduct Committee (“Panel”) found that it had jurisdiction over JB Drax pursuant to Rules 400 and 402 as the conduct occurred while JB Drax was a CME member. The Panel also found that between at least July 8, 2013, and September 25, 2013, two of its employees, a desk clerk and a desk supervisor, engaged in a pattern of conduct whereby they directed brokerage groups to noncompetitively cross a minimum percentage of opposing JB Drax buy and sell orders in the Eurodollar options on futures pit. In addition to indicating that they would withhold executable orders from brokers in the pit, the JB Drax employees indicated that JB Drax brokers would use alternative execution avenues, including block transactions, should the pit brokers fail to cross this minimum percentage of orders. The Panel also found that JB Drax failed to diligently supervise these employees in a manner sufficient to ensure that their conduct was consistent with Exchange rules. Further, the Panel concluded that JB Drax thereby violated CME Rules 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered JB Drax to pay a fine in the amount of $125,000.

EFFECTIVE DATE:

May 26, 2015