• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT 12-9015-BC
      • Effective Date
      • 30 May 2014
    • FILE NO.:

      CBOT 12-9015-BC

      MEMBER:

      CITIGROUP GLOBAL MARKETS, INC.

      CBOT RULE VIOLATION:

      854.B. CONCURRENT LONG AND SHORT POSITIONS (in part)

      B. Concurrent long and short positions in physically delivered contracts that are held by the same owner during the current delivery month must be offset by transactions executed in the market, by allowable privately negotiated transactions, or fulfilled through the normal delivery process, provided however that trades may be transferred for offset if the trade date of the position being transferred is the same as the transfer date. Such positions may not be offset via netting, transfer, or position adjustment except to correct a bona fide clerical or operational error on the day the error is identified and provided that the quantity of the offset does not represent more than one percent of the reported open interest in the affected futures contract month.

      FINDINGS:

      Pursuant to an offer of settlement Citigroup Global Markets, Inc. (“Citigroup” or the “Firm”) presented at a hearing on May 28, 2014, in which Citigroup neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the CBOT Business Conduct Committee (“BCC”) found that it had jurisdiction over Citigroup pursuant to Exchange Rules 400 and 402 as the conduct occurred while Citigroup was a CBOT member, and that on trade date February 29, 2012, Citigroup executed an equal position adjustment of -1,994 by -1,994 in the spot month period of the March 2012 Soybean Meal futures contract. This position adjustment by Citigroup accounted for approximately 14.6% of the final open interest in the March 2012 Soybean Meal futures contract reported on February 27, 2012.

      The Panel found that, as a result, Citigroup violated CBOT Rule 854.B. (Concurrent Long and Short Positions).

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Citigroup Global Markets, Inc. to pay a fine to the Exchange in the amount of $10,000.

      EFFECTIVE DATE:

      May 30, 2014