MEMBER:
Joel J. Stone
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.
FINDINGS:
Pursuant to an offer of settlement in which Joel Stone neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on July 20, 2023, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on numerous occasions from September 4, 2020, through June 1, 2021, Stone entered orders in various Corn, Wheat and Soybean futures markets with the intent, at the time of order entry, to cancel the orders before execution or to modify the orders to avoid execution once he received a fill in a correlated options market. Specifically, Stone entered a large order(s) on one side of the market in Corn, Soybean and Wheat futures while he had a resting options order that was on the same futures contract and directionally opposite his futures order(s). After Stone received a fill on his options order, he cancelled his large order(s) in Corn, Wheat and Soybean futures in full.
The Panel concluded that as a result of the foregoing, Stone violated CBOT Rule 575.A.
PENALTY:
In accordance with the settlement offer, the Panel ordered Stone to pay a fine of $30,000, pay disgorgement of profits in the amount of $31,231.25, and serve a 10-business day suspension from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group, beginning on the effective date below and continuing through and including August 4, 2023.
EFFECTIVE DATE:
July 24, 2023