The Business Conduct Committee ("BCC") of the Chicago
Board of Trade ("CBOT") fined and suspended a trader for disruptive
trading practices.
The BCC ordered the trader to pay $10,000 for violations of
CBOT Rule 575 ("Prohibited Disruptive Practices").
According to the BCC, the trader violated the rule by entering and
then cancelling orders during the pre-opening sessions of the Wheat
and Corn futures markets, which resulted in fluctuations in the
publicly displayed Indicative Opening Price of those futures. In
addition, the BCC suspended the trader for 25 business days.
The CBOT Order states that the trader entered his orders
"to discern the depth of the order book or the previous
day's settlement price." Intuitively, this would seem to
be a benign, indeed legitimate and useful purpose for such a
practice. Yet by prohibiting the entry of an order "with the
intent, at the time of order entry, to cancel the order before
execution or to
