Capstone Investment Advisors, Llc

Allegations: ON OCTOBER 16, 2019, ("HEARING DATE"), THE CHICAGO BOARD OF TRADE ("CBOT") DETERMINED THAT AN EXCHANGE FOR RELATED POSITION ("EFRP") PACKAGE TRADED BY CAPSTONE ON JULY 9, 2018 LACKED BOTH A REASONABLE DEGREE OF PRICE CORRELATION AND OPPOSING MARKET BIAS, AND THUS DEEMED THE TRADE TO HAVE BEEN EXECUTED IN VIOLATION OF CBOT RULE 538.C. Status: Final Sanction Detail: NA Summary: ON OCTOBER 16, 2019, ("HEARING DATE"), CAPSTONE SETTLED WITH THE CHICAGO BOARD OF TRADE ("CBOT") FOR A MATTER RELATING TO AN EXCHANGE FOR RELATED POSITION ("EFRP") PACKAGE TRADED ON JULY 9, 2018. ON THE HEARING DATE, THE CBOT'S TRADE BUSINESS CONDUCT COMMITTEE FOUND THAT THE EFRP IN QUESTION LACKED BOTH A REASONABLE DEGREE OF PRICE CORRELATION AND OPPOSING MARKET BIAS, AND THUS DEEMED THE TRADE TO HAVE BEEN EXECUTED IN VIOLATION OF CBOT RULE 538.C. IN A MUTUALLY AGREED UPON SETTLEMENT OF THIS MATTER, THE CBOT IMPOSED A FINE IN THE AMOUNT OF $15,000 USD, AND CAPSTONE NEITHER ADMITTED NOR DENIED THE RULE VIOLATION ON WHICH THE PENALTY IS BASED.

Allegations: ON MAY 24, 2016, THE FINNISH FINANCIAL SUPERVISORY AUTHORITY (THE "FIN-FSA") LEVIED AN ADMINISTRATIVE FINE ON CAPSTONE VOLATILITY MASTER LIMITED FUND ("CVM") BECAUSE THE FIN-FSA DETERMINED THAT CVM DID NOT TIMELY SUBMIT THE FIN-FSA DISCLOSURE TO COMPLY WITH THE DISCLOSURE REQUIREMENT UNDER ARTICLE 6(1) OF REGULATION (EU) NO 236/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON SHORT SELLING ("SSR"). Status: Final Sanction Detail: FIN-FSA IMPOSED AN ADMINISTRATIVE FINE OF EUR 20,000. Summary: CVM SENT A PUBLIC NOTIFICATION OF A NET SHORT POSITION OF 0.50% IN THE ISSUED SHARE CAPITAL OF NOKIA OYJ ON OCTOBER 10, 2014. FURTHER SHORT POSITION MOVEMENTS LED TO DISCLOSURES CULMINATING TO A 1.19% DISCLOSURE ON NOVEMBER 12, 2015. THEREAFTER, ON NOVEMBER 12, 2015 CVM CLOSED/COVERED THE ENTIRE SHORT POSITION OF NOKIA OYJ. DURING THIS PERIOD CVM MADE 10 TIMELY NOTIFICATIONS DUE TO FLUCTUATIONS IN THE NOKIA SHORT POSITION. ON NOVEMBER 13, 2015, DUE TO ADMINISTRATIVE ERROR, CVM FAILED TO REPORT THAT IT HAD CLOSED OUT OF THE NOKIA POSITION THE PREVIOUS DAY. ON JANUARY 12, 2016, CAPSTONE IDENTIFIED THE ERROR AND SELF-REPORTED THE CORRECTED POSITION TO THE FIN-FSA. THE FIN-FSA SENT A LETTER TO CVM ON MARCH 23, 2016 INFORMING THEM OF THE MATTER AND PROVIDED AN OPPORTUNITY TO RESPOND. HOWEVER, IN ITS SUBSEQUENT DECISION THE FIN-FSA WROTE THAT THE TIME SPECIFIED IN THE SSR FOR SUBMISSION OF A NOTIFICATION TO THE COMPETENT AUTHORITY IS UNCONDITIONAL, AND FAILURE TO COMPLY WITH IT CANNOT BE CORRECTED REGARDLESS OF THE MITIGATING FACTORS HIGHLIGHTED BY CAPSTONE IN ITS RESPONSE. THE FIN-FSA IMPOSED A FINE OF EUR 20,000.