EXCHANGE RULES: RULE 432. GENERAL OFFENSES (IN PART)
It shall be an offense:
B. 1. to engage in fraud or bad faith;
2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;
C. to engage in dishonest conduct;
G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.
RULE 532. DISCLOSING ORDERS PROHIBITED
No person shall disclose another person's order to buy or sell except to a designated Exchange official or the CFTC, and no person shall solicit or induce another person to disclose order information. An order for pit execution is not considered public until it has been bid or offered by open outcry. No person shall take action or direct another to take action based on non-public order information, however acquired. The mere statement of opinions or indications of the price at which a market may open or resume trading does not constitute a violation of this rule.
Pursuant to an offer of settlement Arya Motazedi (“Motazedi”) presented at a hearing on September 9, 2015, in which Motazedi neither admitted nor denied the findings or rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that Motazedi was subject to the jurisdiction of the Exchange pursuant to Rules 400 and 402 as an employee of a NYMEX member during the time period from September 2013 through December 2013 (“relevant time period”), and that on multiple trade dates during the relevant time period, Motazedi while trading for his employer, executed multiple transactions, some of which were round-turn transactions, between his personal trading account, another account over which he had trading authority (“secondary personal account”), and the account he traded for his employer (“employer’s account”). The purpose of each of the round-turn transactions was to move money from the employer’s account to Motazedi’s personal account and the second personal account. Furthermore, in the non-round turn transactions, Motazedi traded ahead of the employer’s account by entering orders for his personal account and the secondary account ahead of the employer’s account and subsequently offsetting those trades opposite the employer’s account, to the disadvantage of the employer’s account.
The Panel found that as a result, Motazedi violated NYMEX Rules 432.B.1., 432.B.2., 432.C., 432.G. and 532.
In accordance with the settlement offer, the Panel ordered Motazedi to pay a fine in the amount of $100,000, pay restitution to his employer in the amount of $216,955.80 and serve a five year suspension of any access to any CME Group Inc. trading floor and of direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including CME Globex. The suspension shall run from December 2, 2015 through December 2, 2020, inclusive.
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