SASCO ENERGY PARTNERS, LLC
RULE 432. GENERAL OFFENSES
It shall be an offense:
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
533. SIMULTANEOUS BUY AND SELL ORDERS FOR DIFFERENT BENEFICIAL OWNERS (IN PART)
A member who is in possession of both buy and sell orders for different beneficial owners for the same product and expiration month, and, for a put or call option, the same strike price, may execute such orders for and directly between such beneficial owners provided that in pit trading, a member executing such orders shall first bid and offer by open outcry three times at the same price, stating the number of contracts, and, thereafter, if neither the bid nor the offer is accepted, the orders may be matched in the presence, and with the approval, of a designated Exchange official.
Pursuant to an offer of settlement that SASCO Energy Partners, LLC (“SASCO”) presented at a hearing on June 24, 2013, in which SASCO neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that SASCO voluntarily submitted to the jurisdiction of the Panel for purposes of settling this matter and that on November 1, 2011, a trader employed by SASCO possessed opposite orders for different beneficial owners and simultaneously placed those buy and sell orders totaling 2,984 contracts with entry time differentials of less than five seconds for the purpose of rebalancing funds between these accounts over which he had discretionary trading authority. SASCO failed to diligently supervise its trader in a manner sufficient to ensure that he was familiar with Exchange rules such as through appropriate compliance training.
The Panel found that as a result of the foregoing, SASCO violated Exchange Rules 432.W. (“General Offenses - Supervision”) and 533 (“Simultaneous Buy and Sell Orders for Different Beneficial Owners”).
In accordance with the settlement offer, the Panel ordered SASCO to pay a fine to the Exchange in the amount of $30,000.
June 26, 2013
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