Tom Lindstrom was indicated by a federal grand jury in Chicago, and also sued civilly by the Commodity Futures Trading Commission in a federal court in Chicago, for hiding trading losses from his employer and causing the firm’s financial collapse. According to the CFTC’s complaint, Mr. Lindstrom was formerly employed by Rock Capital Markets LLC, a proprietary trading firm, where he engaged in trading of options on 10-year US Treasury note futures listed on the Chicago Board of Trade. In order to disguise his trading losses, alleged the CFTC, between January 1, 2014, and January 27, 2015, Mr. Lindstrom purchased “hundreds of thousands” of deep out of the money options for a very nominal price. He did this, said the CFTC, to take advantage of a CBOT pricing convention in effect at the time that priced each option for settlement purposes at a minimum of US $15.63/option. As a result, claimed the CFTC, Mr. Lindstrom was able to show his employer that he had “millions of dollars of phony profits” in his account as opposed to losses. After the CME Group questioned Rock Capital about its large option positions on January 27, 2015, the firm recognized that the purported value of Mr. Lindstrom’s account was false by more than US $15 million, said the CFTC. In fact, the CFTC alleged, Mr. Lindstrom had sustained trading losses in excess of US $13.9 million over the life of his account, “and caused the collapse of Rock Capital.” In the indictment, Mr. Lindstrom was charged with four counts of commodities fraud and four counts of wire fraud. The CFTC seeks an injunction, the imposition of a fine and disgorgement, among other remedies, against Mr. Lindstrom. Since February 29, 2016, all deep out of the money options at the Chicago Mercantile Exchange and the CBOT are settled at $1 (click here to access details of the exchanges’ revised practice).