KEVIN LLEWELLYN (KLEW)
(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(c) Crossing of Orders
Exchange Records for Cross Trades. It shall be the obligation of a floor member executing a cross trade to ensure that every cross trade executed in the ring shall be promptly made a matter of permanent record of the Exchange by the official market reporter which record shall include the exact time of execution, the date, the price, the quantity, the futures contract or futures option, the delivery month, futures option series, or strip transaction, and the name of the floor member executing the cross trade.
104.24(d) Crossing of Orders
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. For purposes of this Rule, any two persons having the following relationship shall be deemed to be affiliated: (1) partners; (2) employees of the same employer; (3) an employer and his employee; (4) any two members temporarily acting in any of the foregoing capacities; (5) officers, directors and 10% shareholders of the same corporation; and (6) members of a broker association, as defined in Rule 6.43A. (e) Temporary Affiliations.
104.27 Prearranged Trades
Except to the extent permitted by the By-Laws and Rules, members are prohibited from making, or attempting to make, any purchase or sale of a futures contract or futures option which directly or indirectly has been pre-arranged.
104.31 Dual Trading
(a) Prohibited Transactions.
(ii) Except to the extent provided in Rule 104.31(b) ("Dual Trading - Permissible Transactions"), a floor member may not sell any futures contract or futures call option or purchase any futures put option in a commodity for his own account or for any account in which he has any direct or indirect interest while holding an order of another person for the sale of a futures contract or futures call option or for the purchase of any futures put option in the same commodity which is executable at the market price or at the price at which such purchase can be made for the member's own account or for the account in which such member has an interest.
104.80 Trading Cards
(a) General Requirements. A floor member shall prepare trading cards on pre-printed and presequenced forms issued or approved by the Exchange on which the floor member shall record, in nonerasable 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 RULE: 8.55(A)(2): Major Offense
(A)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.
(2) to be guilty of fraud or any act of bad faith.
On March 21, 2012, a panel of the COMEX Business Conduct Committee (“Panel”) held a settlement hearing. Based on Mr. Llewellyn’s offer of settlement, made without admitting or denying the rule violations upon which the penalty is based, the Panel found that on May 22, May 27, May 28, June 3, June 4 and June 5, 2008, Mr. Llewellyn engaged in a series of non-competitive, prearranged trades in Silver futures contracts for July 2008 delivery. In addition, the Panel found that on two of these dates (May 28 and June 5, 2008), Mr. Llewellyn improperly traded ahead of an executable customer order. Finally, the Panel found that on several of these days, Mr. Llewellyn failed to properly record trades on his trading cards. As a result of these findings, the Panel determined that Mr. Llewellyn violated legacy COMEX Rules 104.21 (Open Outcry), 104.24(c)(Crossing of Orders), 104.24(d) (Crossing of Orders), 104.27 (Prearranged Trades), 104.31 (Dual Trading) and 104.80 (Trading Cards) as well as legacy Exchange Rule 8.55(A)(2)(Major Offenses).
In accordance with the settlement offer and the Panel’s findings, the Panel ordered that Mr. Llewellyn: (1) pay a fine to the Exchange in the amount of $110,000 (which includes disgorgement in the amount of $13,675); (2) be suspended from all membership and trading privileges on any CME Exchange, including direct or indirect access to Globex, for a period of nine (9) months, commencing on the first business day after the Effective Date; and (3) be suspended from filing for any brokerage for a period of three (3) months commencing on the first business day following the conclusion of the 9 month suspension set forth in (2) above. This decision became final on March 21, 2012 and effective on March 23, 2012.
March 23, 2012