NYMEX RULE VIOLATIONS: NYMEX LEGACY RULE 6.05 TRANSACTIONS, BIDS, AND OFFERS ON THE TRADING FLOOR
(A) Except as otherwise specifically provided in the Bylaws and Rules, all purchases, sales, bids and offers for futures and options contracts:
(1) shall be executed openly and competitively by open outcry in the appropriate trading ring during the authorized hours of trading.
NYMEX LEGACY RULE 6.61 PRE-ARRANGED TRADES
Pre-arranged trades are prohibited.
NYMEX LEGACY RULE 6.90 TRADING CARD PROCEDURES
(B) … All transactions must be recorded in exact chronological order of execution on sequential lines of the trading card without skipping lines between trades.
NYMEX LEGACY RULE 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.
(3) to be guilty of any dishonest conduct;
(7) to engage in wash trading or accommodation trading.
Pursuant to an offer of settlement Peter Venus (“Venus”) presented at a hearing on December 19, 2013, in which Venus neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that Venus voluntarily submitted himself to the jurisdiction of the BCC for purposes of settling this matter and that on six occasions in March 2008 while acting as a broker on the Floor of the Exchange, Venus accommodated other brokers in the Palladium and Platinum ring in the execution of noncompetitive pre-arranged trades by buying/selling for his account opposite the other broker, thereby allowing the broker to take the opposite side of his customer indirectly. On one occasion, he failed to record his transactions in chronological order of execution on his trading card.
The Panel found that as a result, Venus violated Legacy NYMEX Rules 6.05(A)(1) (Transactions, Bids and Offers on the Trading Floor), 6.61 (Pre-Arranged Trades), 6.90(B) (Trading Card Procedures), 8.55(A)(3) (Dishonest Conduct) and 8.55(A)(7) (Wash or Accommodation Trades).
In accordance with the settlement offer, the Panel suspended Venus for a period of eighteen months from (a) applying for membership at any exchange owned, controlled or operated by CME Group Inc.; (b)affiliating with any exchange Member as defined in NYMEX Rule 400 related to business conducted on or subject to the rules of the exchange; and (c) 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, CME Globex. The suspension will run from December 23, 2013 through June 23, 2015.
December 23, 2013
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