NYMEX RULE 432. GENERAL OFFENSES (IN PART)
It shall be an offense:
B. 2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade
NYMEX RULE 531. TRADING AGAINST CUSTOMERS’ ORDERS PROHIBITED
531.A. General Prohibition
No person in possession of a customer order shall knowingly take, directly or indirectly, the opposite side of such order for his own account, an account in which he has a direct or indirect financial interest, or an account over which he has discretionary trading authority.
The foregoing restriction shall not apply to the following:
4. On the Globex platform, a person may knowingly trade against his customer order for his own account, an account in which he has a direct or indirect financial interest, an account over which he has discretionary trading authority, or a proprietary account of his employer, only if the customer order has been entered immediately upon receipt and has first been exposed on the Globex platform for a minimum of 5 seconds in the case of futures orders …
Pursuant to an offer of settlement that Robert Tongue (“Tongue”) presented at a hearing on March 20, 2013, in which Tongue neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that Tongue voluntarily submitted himself to the jurisdiction of the Panel for purposes of settling this matter and that for the time period June 2011 through December 2011, he possessed customer orders and knowingly took the opposite side of such orders for an account over which he had discretionary trading authority without first exposing the customer’s futures orders on the Globex platform for a minimum of five seconds on 11 occasions.
The Panel found that as a result of the foregoing, Tongue violated Exchange Rules 531.A (Trading Against Customer Orders) and 432.B.2. (Just and Equitable Principles of Trade).
In accordance with the settlement offer, the Panel ordered Tongue to pay a fine to the Exchange in the amount of $20,000. The Panel also suspended Tongue from all direct or indirect access to any trading floor or electronic trading or clearing platform owned or operated by CME Group Inc., including Globex, for a period of 5 business days. The suspension will run from March 22, 2013 through March 28, 2013.
March 22, 2013
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