R.J. O’Brien & Associates to pay fine for violation of CBOT rules
International derivatives marketplace CME Group has published a notice of disciplinary action as to R.J. O’Brien & Associates LLC (RJO).
Pursuant to an offer of settlement in which RJO neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on August 30, 2022, a Panel of the Chicago Board of Trade (CBOT) Business Conduct Committee (Panel) found that on multiple occasions between May 1, 2020, and July 21, 2020, RJO traders entered orders in Corn, Soybean, Soybean Meal, Soybean Oil, KC HRW Wheat, Chicago SRW Wheat, and E-mini Dow futures markets through a third-party trading platform for the purpose of filling customer orders upon market open.
The RJO traders used the platform’s synthetic market-on-open order type functionality to fill these orders, and the platform entered and modified crossed-market orders during the pre-open session. These order entries and modifications adversely impacted the IOP.
The Panel also found that while the traders were trained to use the third-party trading platform, RJO failed to diligently supervise the processing of orders in the marketplace placed using the trading platform in accordance with Exchange rules.
The Panel concluded that RJO thereby violated CBOT Rule 432.W., and that pursuant to CBOT Rule 433, is strictly liable for the acts of its employees whose conduct violated CBOT Rule 432.Q.
In accordance with the settlement offer, the Panel ordered RJO to pay a fine in the amount of $20,000.