CME today published a notice of disciplinary action against Christopher McGrath. Under a settlement in which Mr McGrath neither admitted nor denied the alleged rule violations, he will have to pay a fine and be suspended for 55 days.

A Panel of the Chicago Mercantile Exchange (CME) Business Conduct Committee has found that on September 11, 2018, October 18, 2018, November 8, 2018, and January 4, 2019, McGrath, a broker in the Eurodollar options on futures pit, non-competitively traded customer orders opposite other brokers within the same broker association without openly and competitively bidding or offering the orders in the pit.

Specifically, the Panel found that after receiving buy and sell orders for September 2018 Eurodollar Put strategies, December 2018 Eurodollar Put strategies, December 2018 Eurodollar 2-Year Midcurve Options strategies, and March 2019 Eurodollar Call strategies, McGrath prearranged the execution of the entire smaller quantity of the opposing buy or sell order opposite the larger buy or sell order held by another broker within his broker association.

In addition, the Panel found that two customer orders executed between McGrath and other brokers in his broker association were improperly documented as resulting from “best and only bids and offers” (“B+O”), as the brokers non-competitively executed the orders intra-association before trading the remaining quantity in the pit.

The Panel thereby concluded that McGrath violated CME Rules 521, 539.A., and 515.

In accordance with the settlement offer, the Panel ordered McGrath to pay a fine in the amount of $85,000, and to have his access to all CME Group trading floors and direct and indirect access to all trading platforms owned or controlled by CME Group suspended for a period of 55 business days.

The suspension will run from April 26, 2021, through July 13, 2021, inclusive.