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which the proceedings against petitioner were based arose out of
petitioner's business as a floor broker. Petitioner had
previously paid a $1,000 fine to the CME for violating its rule
limiting the amount of trading among members of the same
brokerage association. Sanctions imposed by the CME during 1987
and 1988 for violations of its rules governing brokerage
associations tended to consist of warning letters and fines
ranging from $1,000 to $10,000.
Petitioner, Mr. Lowrance, Mr. Maloney, and Mr. Elliott made
offers to settle the charges against each of them without
admitting or denying violations of the CME's rules. Based on the
offers, the CME's Business Conduct Committee concluded that
petitioner, Mr. Lowrance, and Mr. Maloney each pre-arranged
Eurodollar futures trades with Mr. Elliott for the purpose of
evading the CME's limits on execution of customer orders with
other members of the same brokerage association. In so doing,
the committee concluded that each of those individuals had
committed an act that was substantially detrimental to the
interest or welfare of the CME, a major offense pursuant to the
CME's rules, and had engaged in prohibited pre-arranged trading,
a minor offense pursuant to those rules. The committee
accordingly imposed the following fines and suspensions of
exchange membership privileges:
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