NOTICE OF DISCIPLINARY ACTION

MEMBER:

Amy Lubeck

EXCHANGE RULES:

EXCHANGE RULE 539.C. PRE-EXECUTION COMMUNICATIONS REGARDING GLOBEX TRADES (in part)

Parties may engage in pre-execution communications with regard to transactions executed on the Globex platform where one party (the first party) wishes to be assured that a contra party (the second party) will take the opposite side of the order under the following circumstances:

3. Permissible Entry Methods for Orders

d. RFQ + RFC Cross (“R-CROSS”)

Following the pre-execution communication, a Request for Quote (“RFQ”) for the particular option or option spread or combination must be entered into Globex. Thereafter, the RFC order must be entered no less than fifteen (15) seconds and no more than thirty (30) seconds after the entry of the RFQ in order to proceed with the trade. The RFQ and the RFC order must be entered within the same trading session. Failure to enter the RFC order within 30 seconds after the entry of the RGQ will require a new RFQ to be entered prior to the entry of the RFC order, which must be entered in accordance with the time parameters described above in order to proceed with the trade.

EXCHANGE RULE 529 WITHHOLDING ORDERS PROHIBITED

A member or any person entering orders on the Globex platform, shall not withhold or withdraw from the market any order, or any part of an order, for the benefit of any other person other than the person placing the order.

FINDINGS:

Pursuant to an offer of settlement that Amy Lubeck (“Lubeck”) presented at a hearing on April 17, 2019, in which Lubeck neither admitted nor denied the findings or conclusions or the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that from February 10, 2017 through June 20, 2017, there were multiple instances during which Lubeck, acting as a broker, had pre-execution communications prior to the execution of a trade. Specifically, Lubeck informed prospective counter-parties whether her customers intended to buy or sell various Heating Oil Option Strips. The Panel found that after having relayed such information, Lubeck did not subsequently ensure that the requisite Request for Quote and Request for Cross were submitted to Globex before the execution of the trades. Additionally, the Panel found that there were several instances in which Lubeck, despite the entry of better offers and/or bids onto Globex, withheld a customer’s order until the more favorable bid or offer was cancelled, to ensure that her customer’s order was executed opposite the individual with whom Lubeck had pre-execution communications. The Panel determined that as a result of Lubeck having withheld orders, Lubeck’s customers failed to realize $2,118 in profit.

The Panel concluded that Lubeck violated Exchange Rule 539.C.3.d. and 529

PENALTY:

In accordance with the settlement offer, the Panel ordered Lubeck to pay a fine to the Exchange in the amount of $30,000 and pay restitution to her customers in the amount of $2,118.