NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

EOX Holdings, LLC

EXCHANGE RULES: EXCHANGE RULE 526. BLOCK TRADES

The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:

F. Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.

MRAN RA1701-5 (in part)
Market participants must exercise diligence in accurately reporting the execution of the block trade. The reporting of inaccurate execution times may result in disciplinary action.

EXCHANGE 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.

FINDINGS:

Pursuant to an offer of settlement that EOX Holdings, LLC (“EOX”) presented at a hearing on June 12, 2018, in which EOX neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that from March 1, 2017 through May 23, 2017, EOX was the executing broker for various block trades in Crude Oil, Natural Gas, Propane and Propylene contracts and misreported the execution times of the block trades to the Exchange. That EOX failed to diligently supervise its employees or agents in its reporting of block trades to the Exchange by failing to have established procedures to review block trades before and after submission to the Exchange to ensure that EOX’s block trade execution times were accurate.

The Panel concluded that, as a result EOX violated Exchange Rules 526.F. (Block Trades) by misreporting the execution time of block trades in multiple instances and Exchange Rule 432.W (General Offenses—Supervision) by failing to adequately supervise its brokers.

PENALTY:

In accordance with the settlement offer, the Panel ordered EOX to pay a fine to the Exchange in the amount of $75,000.