NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

HYEONGSIK KIM

RULE VIOLATION: NYMEX RULE 534 WASH TRADES PROHIBITED

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

On June 26, 2019, a Panel of the New York Mercantile Exchange (“NYMEX”) Probable Cause Committee charged Hyeongsik Kim (“Kim”) with violating NYMEX Rule 534 based on allegations that Kim knowingly placing opposing orders for accounts under his control with the same beneficial owner with the intention that the orders trade opposite each other in the Crude Oil Futures market.

On August 30, 2019, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) entered an order finding that Kim failed to answer the charge against him. The Hearing Panel Chair further ordered that Kim was deemed to have admitted the charge issued and waived his right to a hearing on the merits of the charge.

On September 12, 2019, a penalty hearing was held before a panel of the NYMEX BCC (“BCC Panel”) which found that Kim had committed the violation charged.

PENALTY:

In accordance with NYMEX Rule 402.B (Sanctions), the BCC Panel ordered Kim to pay a total monetary fine in the amount of $50,000 and to serve a two-year suspension from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group. The suspension shall run from October 2, 2019 through, and including, October 2, 2021.