NOTICE OF DISCIPLINARY ACTION

MEMBER:

George G. Robb

CME RULE VIOLATIONS:

CME Rule 432.X. General Offenses (in part)

It shall be an offense to aid or abet the commission of any offense against the
Exchange.

CME Rule 531.A. Trading Against Customers’ Orders Prohibited (General Prohibition)

No person in possession of a customer order shall knowingly take, directly or
indirectly, the opposite side of such order for his own account, an account in
which he has a direct or indirect financial interest, or an account over which he
has discretionary trading authority.

CME Rule 532. Disclosing Orders Prohibited (in part)

An order for pit execution is not considered public until it has been bid or offered by open outcry. No person shall take action or direct another to take action based on non-public order information, however acquired.

CME Rule 536. Recordkeeping Requirements for Pit, Globex and Negotiated Trades
(A)(2)(a). Individual Member Orders (in part)

A member on the trading floor who enters an order with another member shall record the order instructions and the time of placement to the nearest minute in sequence with the other trades recorded on his pre-sequenced trading cards.

The member executing the order must record the time of execution to the nearest minute for each execution made for the order on the trading card or other document used to record the trade(s) and must return this card or document to the initiating member.

The trading card used to record the placement of the flashed or verbal order and any trading card or document used to record the execution of the order must be submitted together to the clearing member by the member placing the order or his representative.
…
D. Customer Type Indicator (CTI) Codes (in part)

Each clearing member must identify each transaction 1) executed on the trading floor, 2) executed on the Globex platform or 3) privately negotiated as a block trade pursuant to Rule 526 or an EFRP pursuant to Rule 538 on the record of the transaction submitted to the Exchange with the correct customer type indicator (CTI) code. The CTI codes are as follows:

CTI 1: Electronic Trading, Open Outcry and Privately Negotiated – Applies to transactions initiated and executed by an individual member for his own account, for an account he controls, or for an account in which he has an ownership or financial interest. However, transactions initiated and executed by a member for the proprietary account of a member firm must be designated as CTI 2 transactions.
…
CTI 3: Electronic Trading – Applies to orders entered by a member or a nonmember terminal operator for the account of another individual member or an account controlled by such other individual member. CTI 3: Open Outcry and Privately Negotiated – Applies to orders that a member executes on behalf of another individual member, or for an account such other member controls or in which such other member has an ownership or financial interest.

CME Rule 501. Employees of Members (in part)

Members shall register with the Exchange all persons whom they wish to employ on the trading floor. Such employees may act as runners, communicators, clerks and broker assistants. Such employees shall not be permitted to solicit customers or benefit from the production of orders. Such employees shall not trade or have any interest in an account trading in any CME or CBOT futures or options contracts. Employees must wear a prescribed identification badge. Any member permitting trading by such employee shall be guilty of an offense against the Exchange. Remuneration to such employees shall be limited to salaries and normal bonuses. The member employer shall, upon request, provide a report to Exchange staff with respect to each such employee, setting forth the hours of employment, salary and bonus, and a copy of each employee's Internal Revenue Service W-2 Form or other documentation evidencing employment.

FINDINGS:

On October 22, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Probable Cause Committee (“PCC”) charged member George G. Robb (“Robb”) with violating CME Rules 432.X., 531.A., 532., 536.(A)(2)(a), and 501., based on allegations that on one or more occasions between January 2013 and March 2014, Robb did the following: placed orders for execution based on non-public order information; while in possession of a customer order, knowingly took, indirectly, the opposite side of such order for his own account; entered an order with another member and failed to record the order instructions and the time of placement; remunerated his electronic execution clerk in a manner that was not limited to a salary and normal bonus; and aided or abetted the commission of an offense against the Exchange.

On May 2, 2016, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) entered an order finding that Robb failed to answer the charges issued against him. In failing to answer the charges, the Hearing Panel Chair further ordered that Robb was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

Pursuant to CME Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on July 12, 2016. The Panel found Robb guilty of committing the admitted charges.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Robb to pay a fine in the amount of $85,000, disgorge profits in the amount of $126,545, and to have his access to all CME Group trading floors and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group, and affiliation with, employment by, or association with a Member (as this term in defined in Rule 400) or affiliate of a Member of any CME Group Exchange suspended for a period of eight years.

EFFECTIVE DATE:

August 16, 2016