(previously known as Exchange Docket 10-02)
ANDREW MORAN (DDAY)
(LEGACY) COMEX RULES:
104.21 Open Outcry
Except to the extent otherwise permitted by the By-Laws and Rules, every order to buy or 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 during the hours specified in the By-Laws and Rules.
104.24 Crossing of Orders
(d) Prohibited Cross Trades: A floor member may not, directly or indirectly, for himself or for a member firm with which he is affiliated, take the other side of an order he has received except in accordance with Section (f) of this Rule and with Rule 104.71 ("Resolution of Out-Trades and Errors") nor may he execute a trade on behalf of a customer opposite any broker with whom he is affiliated.
104.38 Execution of Spread Transactions
(d) Certain Prohibitions: No member shall couple separate orders or couple orders with trades for his own account and execute them as a spread transaction.
104.80 Trading Cards
(a) General Requirements: A floor member shall prepare trading cards on pre-printed and pre-sequenced forms issued or approved by the Exchange on which the floor member shall record, in non-erasable ink, in sequential order without skipping any trade entry lines, each price indication he has announced (during the pre-opening market indication period) and each transaction he has executed, in the exact chronological order of execution, provided that if additional trade type information is required by the By-laws or Rules of the Exchange, such as in the case of transactions involving execution of a differential, exchanges for physicals and cabinet trades, serial trade entry lines may be used to record the transaction as a whole. In addition, any floor member who has placed a verbal order with another floor member for execution as a CTI #3 trade, other than an order for one or more legs of a spread transaction in which the initiating floor member has personally executed at least one leg of the spread, shall simultaneously record the terms of the order and its time of placement on his trading card, in non-erasable ink, if he has not prepared a memorandum of the terms of such order in accordance with Rule 104.81(b).
(LEGACY) EXCHANGE RULES:
8.00(E) Reports and Records
The Compliance Department shall investigate the conduct and transactions of Members, Member Firms and employees of any of the foregoing and may examine the books and records of Members, Member Firms and employees of the foregoing Members, Member Firms and employees of any of the foregoing shall make their books and records available to the Compliance Department and shall respond to all inquiries of the Compliance Department at the time, place, and in the manner designated by the Compliance Department.
8.25 Cease and Desist Order
A violation of a cease and desist order may be determined to be either a major or a minor offense.
8.55 Classification 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.
(12) to refuse to appear before … any investigative and hearing committee … in connection with any investigation; to refuse to fully answer all questions and produce all books and records at such hearing or investigation,…;
(B) Minor 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 minor offenses of the Exchange.
(2) to engage in conduct inconsistent with just and equitable principles of trade.
The New York Mercantile Exchange took final disciplinary action against Andrew Moran (also known as Badge “DDAY” and hereinafter “Moran”), a Member of the COMEX Division of the New York Mercantile Exchange, Inc. On August 27, 2010, the COMEX BCC Hearing Panel Chair held that Moran failed to file an answer to the Charging Memorandum, and that by failing to answer, all the charges against Moran are deemed admitted and Moran’s right to a hearing on the charges is deemed waived. After a hearing on December 6, 2010, the COMEX BCC Panel (the “Panel”) found that on November 23, 2007, Moran traded ahead and indirectly took the opposite side of his customer orders to buy GCZ07 futures by engaging in pre-arranged, non-competitive, and improperly legged spreads opposite local floor traders, failed to maintain and produce requested trade records; and failed to appear for scheduled interviews; and violated a prior cease and desist order. In so doing, Moran violated the following legacy rules: COMEX Rules 104.21, 104.24(d), 104.38(d), 104.80(a), and Exchange Rules 8.00(E), 8.25, 8.55(A)(12) and (B)(2).
In accordance with its findings, the Panel ordered that Moran (1) pay a fine to the Exchange in the amount of $45,000; (2) disgorge profits in the amount of $34,730; (3) be barred from reapplication to the Exchange in any capacity and from directly or indirectly accessing (trading, entering orders or soliciting business) any CME Group market for a period concluding one month after the later of (i) one day after the Effective Date of this Order or (ii) the date upon which the above-noted sanctions are paid in full; and (4) Cease and Desist from subsequent similar rule violations. This decision became final on December 13, 2010 and effective on January 17, 2011.
January 17, 2011