FILE NO.:
CBOT 12-8969-BC
MEMBER:
Chopper Trading, LLC
CBOT RULE VIOLATIONS:
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.
FINDINGS:
Pursuant to an offer of settlement in which Chopper Trading, LLC (“Chopper Trading”) neither admitted nor denied the rule violations upon which the penalty is based, on November 25, 2013, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that on March 5, 2012, between 9:48 AM and 2:01 PM CT, and on March 6, 2012, between 6:29 AM and 10:12 AM CT, Chopper Trading utilized an automated trading system (“ATS”) which entered an excessive number of price modifications to one-lot orders in the June 2012 E-mini Dow futures contract on the Globex electronic trading platform. After observing excessive price modifications during the trading at issue, Chopper Trading discontinued use of the ATS in the E-mini Dow market. Though Chopper Trading tested and utilized this ATS in more liquid Exchange products without incident, Chopper Trading failed to perform specific testing or simulation of this ATS to ensure its suitability for trading in the back month E-mini Dow market prior to its live deployment in that market.
The Panel concluded that Chopper Trading violated CBOT Rules 432.Q and 432.W.
PENALTY:
In accordance with the settlement offer, the Panel ordered Chopper Trading to pay a fine of $20,000.
EFFECTIVE DATE:
November 27, 2013