1. B/D's Customer Reserve Account Found to be Under-Reserved.
2. Market Maker Marked Hundreds of 'Sell Short' Orders in Error. 
3. B/D Failed to Enforce a Trader's Trading Restriction.

    1.  B/D's Customer Reserve Account Found to be Under-Reserved.  Citadel Securities LLC, a Designated Primary Market-Maker, agreed to a $30K fine to settle CBOE charges that, on or about 1/8/10 and 1/11/10, Citadel’s customer reserve bank account allegedly was under-reserved. In accepting the Offer of Settlement, the CBOE's Business Conduct Committee considered the following factors: (i) the Reserve Calculations were the first 2 calculations performed by Citadel after it elected to become subject to Rule 15c3-3 of the Act;  (ii) Citadel self-reported the violation;  (iii) duration of the conduct was limited in scope;  and, (iv) Citadel had no prior disciplinary history at the Exchange.

Rule 15c3-3 of the Act requires a broker-dealer to calculate what amount, if any, it must deposit on behalf of customers in the reserve bank account - i.e., "Special Reserve Bank Account for the Exclusive Benefit of Customers" - under the formula set forth in Rule 15c3-3a.  This would include any amounts the B/D owes its customers and the amount of funds generated through the use of customer securities, called credits, which is compared to any amounts its customers owe it, called debits.  If credits exceed customer debits, the B/D must deposit that net amount in the Reserve Bank Account.  [CBOE File 10-0035, 11/1]

    2.  Market Maker Marked Hundreds of 'Sell Short' Orders in Error.   BDS Trading LC, a market maker conducting a proprietary trading business, agreed to a $12.5K fine to settle CBOE charges that, in or about February 2010, it allegedly improperly marked all 748 sales reviewed by CBOE examiners.  Specifically, the sell orders were marked as "sell short" when BDS had a net long position.   [CBOE File 10-0037, 11/1]

    3.  B/D Failed to Enforce a Trader's Trading Restriction.   Assent LLC, a Trading Permit Holder registered to conduct a prop trading business, agreed to a $75K fine to settle CBOE charges that, from May 2007 through October 2007, it acted through an Associated Person (Prop Trader) who inappropriately capitalized on price movements in corresponding options.  During that time, Assent failed to adequately supervise its Prop Trader by failing to enforce a Trading Restriction that the firm had earlier imposed on that individual.

i.e., the Prop Trader allegedly effected numerous transactions in which he purchased and sold (or sold short and purchased) numerous shares of stock, including of liquid securities, over a short duration of time which, in certain instances, briefly affected the price of the underlying security and, subsequently, the Prop Trader purchased and/or sold numerous corresponding options contracts in that security.  As a result, the Prop Trader inappropriately capitalized on price movements in corresponding options.   [CBOE File 10-0033, 9/14]