NOTICE OF DISCIPLINARY ACTION

MEMBER:

Gregory Wasserman

CBOT RULE VIOLATIONS:

Rule 575. Disruptive Practices Prohibited (in part)

All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.

A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution;

B. No person shall enter or cause to be entered an actionable or non-actionable message(s) with intent to mislead other market participants;

D. No person shall enter or cause to be entered an actionable or non-actionable message(s) with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

FINDINGS:

On November 4, 2022, the Chief Regulatory Officer issued charges against Gregory Wasserman for violating CBOT Rules 575.A., 575.B., and 575.D. based on allegations that from December 19, 2018, through November 8, 2019, Wasserman entered orders for Soybean, Soybean Meal, and Soybean Oil futures without the intent to trade but with the intent to cancel the orders before execution or modify the orders to avoid execution. Wasserman also entered the orders with the intent to mislead other market participants and with the intent to disrupt, or with reckless disregard for the adverse impact on the orderly conduct of trading or the fair execution of transactions. Specifically, Wasserman entered orders for large quantities on one side of the market along with orders for small quantities on the opposite side of the same market. Once the small-quantity orders traded, Wasserman fully canceled the large-quantity orders. Wasserman also followed this same pattern of order entry and cancelation in related markets, whereby he entered large-quantity orders in one market along with small-quantity orders on the opposite side in a related market. In addition, Wasserman entered and quickly canceled large orders at the front of the order book with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

Further, from September 24, 2019, through January 23, 2020, Wasserman entered orders during the pre-open period in the Soybean, Soybean Meal, and Soybean Oil futures markets with the intent, at the time of order entry, to cancel or modify the order before execution. Many of Wasserman’s orders during these pre-open periods affected the indicative opening price to a degree that Wasserman would be able to detect the presence or absence of iceberg and stop orders. Further, Wasserman continued to engage in this non-bona fide and disruptive activity after he received a warning that it appeared to violate exchange rules.

On May 17, 2023, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) found that Wasserman failed to submit a written answer to the charges issued against him and that Wasserman was deemed to have admitted the charges. Wasserman therefore waived his right to a hearing on the merits of the charges.

Pursuant to CBOT Rule 408.F., a BCC Panel found Wasserman guilty of committing the admitted charges and held a penalty hearing thereafter.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Wasserman to pay a $150,000 fine. The Panel also permanently suspended Wasserman from direct access to any trading floor owned or controlled by CME Group, from direct and indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or controlled by CME Group, and from having a business affiliation with, employment by or having a financial or beneficial interest in a Member or broker association.