Wolverine Trading, LLC
CME RULE VIOLATION:
Rule 432 (“General Offenses”) (in part)
It shall be an offense:
Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
Pursuant to an offer of settlement in which Wolverine Trading, LLC (“Wolverine”) neither admitted nor denied the rule violation upon which the penalty is based, on August 19, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“BCC” or “Panel”) found that it had jurisdiction over Wolverine pursuant to Rules 400 and 402 as the conduct occurred while Wolverine was an affiliate of a CME member. The Panel further found that over the course of several hours on March 21, 2014, Wolverine operated an automated trading system (“ATS”) that, due to a sequence number log naming error by Wolverine, sent over 27,000 resend requests to the Exchange. Despite efforts by the Exchange to contact Wolverine, the ATS continued to submit resend requests until the Exchange initiated a closure of all of Wolverine’s ports. The Panel further found that Wolverine’s monitoring and internal notification processes were insufficient to recognize or stop the ATS from continuing to submit resend requests. The Panel concluded that Wolverine thereby violated CME Rules 432.Q. and 432.W.
In accordance with the settlement offer, the Panel ordered Wolverine to pay a fine in the amount of $125,000.
August 21, 2015