The Business Conduct Committee of CBOE - Chicago Board Options Exchange - disciplined 4 member firms and one individual, including a case involving nearly $230,000 in fines and disgorgement. 

    1.  Market Maker and Its Nominee fined $75K jointly and severally, and disgorged of $155,000.   Group One Trading and nominee Salvino, from January 2006 through May 2007, allegedly committed the following violations: 

• effected 12 short-term FLEX transactions (3 by Salvino) in conjunction with stock purchases to circumvent Reg. SHO closeout obligations.
• effected at least 23 short-term FLEX transactions (4 by Salvino) in conjunction with stock sales thereby assisting other market participants in circumventing their Reg. SHO close-out obligations.
• failed to locate numerous shares of Reg. SHO threshold securities, improperly availing themselves of the Reg. SHO market-maker exception to locate stock before selling short on at least 18 occasions.
• failed to establish and maintain adequate WSP's covering Reg. SHO compliance.

    2.  Permit Holder/Prop Trader fined $5K.  ProTrade Securities, in or about January 2010, is alleged to have:  (i) failed to obtain outside brokerage account disclosure forms for 5 of 41 associated persons; (ii) failed to obtain and review outside brokerage account statements for 22 of 50 disclosed accounts held by assoc'd persons;  (iii) failed to obtain 1 of 41 insider-trading attestations; and, (iv) failed to evidence reviews of personal brokerage account statements.

    3.  Market Maker/Prop Trader fined $10K.  Cornerstone Trading, in or about January 2010, is alleged to have:  (i) failed to close out 5 fail-to-deliver positions within required timeframe;  (ii) failed to adequately supervise these transactions. 

    4.  Market Maker/Prop Trader fined $5K.  Toro Trading allegedly filed its annual audited financials for year ended 12/31/09 late - by 7 days.  [C-I Note:  No prisoners - couldn't "catch a pass."  Perhaps firm has had a pattern of late filings.]

The above cases were reported by CBOE on 9/28.  To see all cases for 2010 and prior, click onto:   [ CBOE Disciplinary Actions ]