NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Sergio David Vasquez Montoya

NYMEX RULE VIOLATIONS:

Rule 432. General Offenses (in part)

It shall be an offense:

…

G. to prearrange the execution of transactions in Exchange products for the purpose of transferring
equity between accounts;

…

L.1. to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any
investigation;

Rule 576. Identification of Globex Terminal Operators

Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.

FINDINGS:

On October 10, 2019, a Panel of the New York Mercantile Exchange “(NYMEX”) Probable Cause Committee (“PCC”) charged non-member Sergio David Vasquez Montoya with violating NYMEX Rules 432..G., 432.L.1., and 576, based on allegations that on multiple trading days in September 2017, Montoya executed prearranged trades in E-mini Crude Oil futures contracts on the Globex electronic trading platform for the purpose of transferring equity between two accounts. In addition, Montoya utilized another individual’s Tag 50 user ID to enter the orders. Further, Montoya failed to appear before Exchange staff for a scheduled staff interview.
On November 19, 2019, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) entered an order finding that Montoya failed to answer the charges issued against him. In failing to answer the charges, the Hearing Panel Chair further ordered that Montoya was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

Pursuant to NYMEX Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on December 12, 2019. The Panel found that Montoya committed violations of NYMEX Rules 432.G., 432.1., and 576 and ordered Montoya to pay a fine of $100,000 and restitution in the amount of $9,775.00. The Panel also permanently suspended Montoya from direct access to any trading floor owned or controlled by CME Group and from direct or indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or operated by CME Group.

On December 20, 2019, Montoya filed a Notice of Appeal of the BCC Panel’s December 12, 2019 decision. On February 25, 2020, the parties, in conjunction with the Exchange Legal Department, determined a briefing schedule for the appeal. Montoya failed to file an appellate brief and thus failed to comply with NYMEX Rule 411. On August 3, 2020, the Appellate Panel affirmed the BCC Panel’s decision.

PENALTY:

In accordance with NYMEX Rule 411, the Appellate Panel ordered that Montoya pay a fine of $100,000 and restitution in the amount of $9,775.00, and be permanently suspended from direct access to any trading floor owned or controlled by CME Group and from direct or indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or operated by CME Group.