JOHN P. BYRNE JR. (BRNZ)
COMEX RULE VIOLATIONS:
Legacy COMEX Rule 104.21 – OPEN OUTCRY
Except to the extent otherwise permitted by the By-Laws and Rules, every order to buy and sell, and every purchase and sale of, a futures contract or futures option must be offered or executed openly and competitively by public outcry in a ring specified in the By-Laws and Rules.
NYMEX RULE VIOLATION:
Legacy NYMEX Rule 8.55 – CLASSIFICIATION OF OFFENSES
(A) Major Offenses – No Member, Member Firm, or any employee of the foregoing shall commit a violation of any of the following rules, which shall be deemed major offenses of the Exchange.
(18) to commit an act which is substantially detrimental to the interests or welfare of the Exchange.
Pursuant to an offer of settlement in which John Byrne (Byrne) neither admitted nor denied the findings or rule violations upon which the penalty is based for purposes of resolving this matter, on July 28, 2011, a panel of the COMEX Business Conduct Committee (the “Panel”) found that during the relevant time period, Byrne was a dual trader in the Silver options ring at COMEX. The Panel further found that on six (6) occasions from October through December 2008, Byrne executed noncompetitive Silver options trades opposite other traders for his benefit. As a result of these trades Byrne profited $13,450.
The Panel found that in so doing, Byrne violated Legacy COMEX Rules 104.21 and Legacy NYMEX Rule 8.55(A)(18).
In accordance with the settlement offer, the Panel ordered Byrne to (i) pay a fine to the Exchange in the amount of $50,000; (ii) disgorge $13,450 in profits; (iii) serve a suspension for a period 5 calendar weeks of his 1) membership privileges, 2) access to all CME Group Inc. trading floors, and 3) direct access to all electronic trading and clearing platforms owned or controlled by CME Group, including CME Globex.
August 1, 2011
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