COMEX RULE VIOLATIONS:
432. GENERAL OFFENSES
It shall be an offense:
B. to engage in fraud, bad faith or in conduct or proceedings inconsistent with just and equitable principles of trade;
C. to engage in dishonest conduct;
I. to make a verbal or written material misstatement to the Board, a committee, or Exchange employees;
Q. to commit an act which is detrimental to the interest or welfare of the Exchange or
to engage in any conduct which tends to impair the dignity or good name of the Exchange.
The Commodity Exchange Inc. (“COMEX”) took final disciplinary action against Ted Barnett (“Barnett”), a former clerk of a COMEX full member. On May 16, 2011, the COMEX Business Conduct Committee Hearing Panel Chair held that Barnett failed to file an answer to the Charging Memorandum and that by failing to answer, all the charges against Barnett are deemed admitted and Barnett’s right to a hearing on the charges is deemed waived. After a hearing on June 6, 2011, a Panel of the COMEX Business Conduct Committee (“the Panel”) found that Barnett knowingly made material misstatements to the Exchange on his Badge Renewal Form from 2005 through 2009 that falsely identified Barnett as a clerk-employee of a COMEX member thereby giving Barnett access to the NYMEX building and the Exchange trading floor for the purpose of operating a “freelance clerking” business on the Exchange Floor.
In so doing, the panel found Barnett violated COMEX Rules 432.B., 432.C., 432.Q. and 432.I.
In accordance with its findings, the Panel ordered that Barnett (i) pay a fine to the Exchange in the amount of $50,000; (ii) be barred for a period beginning on the effective date of the committee’s decision and lasting two years from the date the fine is paid in full from 1) applying for membership at any exchange owned, controlled, or operated by CME Group Inc., and 2) directly or indirectly accessing, placing orders, or executing trades on any trading or clearing platform owned, controlled, or operated by CME Group Inc., including, but not limited to, the CME Globex electronic trading platform; and (iii) cease and desist from subsequent similar rule violations. This decision became final on June 6, 2011 and effective on July 11, 2011.
July 11, 2011
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