NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

William R. Kruse

CME RULE VIOLATIONS:

Rule 562. Position Limit Violations (in part)

Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.

FINDINGS:

Pursuant to an offer of settlement in which William R. Kruse (“Kruse”) neither admitted nor denied the rule violations upon which the penalty is based, on August 12, 2015, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that Kruse was subject to the Panel’s jurisdiction pursuant to Rules 402 and 418. The Panel also found that at the close of business on August 22, 2014, Kruse held an end of day futures equivalent long position of 361.878 August 2014 Feeder Cattle futures and options on futures contracts, which exceeded the spot month speculative position limit of 300 contracts by 61.878 contracts, or by 20.6%. On the following trade date, August 25, 2014, prior to realizing he was over the limit, Kruse increased his August 2014 Feeder Cattle futures position, giving him an intraday high of 387.878 contracts, which exceeded the spot month speculative position limit of 300 contracts by 87.878 contracts, or by 29.29%. After realizing he was over the limit, Kruse liquidated his overage to bring his positions into compliance, resulting in profits of $39,897. The Panel concluded that as a result of the foregoing, Kruse violated CME Rule 562.

PENALTY:

In accordance with the settlement offer, the Panel ordered Kruse to pay a fine in the amount of $25,000 and disgorge profits of $39,897.

EFFECTIVE DATE:

August 14, 2015