NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

ADAM COBB WEBB

NYMEX RULE VIOLATIONS:

Rule 575. Disruptive Practices Prohibited

A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

B. No person shall enter or cause to be entered an actionable or non-actionable message(s) with intent to mislead other market participants.

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.

FINDINGS:

Pursuant to an offer of settlement in which Adam Cobb-Webb neither admitted nor denied the rule violations or factual allegations upon which the penalty is based, on February 14, 2024, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that from December 2021, through January 2022, Cobb-Webb entered orders in the February 2022 Crude Oil futures markets with the intent, at the time of order entry, to cancel those orders before execution and to mislead other market participants. Specifically, the Panel found that on multiple occasions during that same period, Cobb-Webb layered multiple orders on one side of the market opposite his existing orders that rested on the other side of the market. After the existing passive orders traded, Cobb-Webb canceled the layered orders. By layering and cancelling orders without the intent to trade, Cobb-Webb sent false signals of supply and demand to the marketplace. The Panel further found that as a result of this disruptive trading activity during the relevant timeframe, Cobb-Webb realized a financial benefit of $191,670.

The Panel also found that from May 2021, through January 2022, Cobb-Webb knowingly placed or accepted buy and sell orders in the same product and expiration month, where he knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk, in various Crude Oil futures markets.

The BCC Panel found that, as a result, Cobb-Webb violated NYMEX Rules 575.A. 575.B., and 534.

PENALTY:

In accordance with the settlement offer, the BCC ordered Cobb-Webb to pay a fine in the amount of $75,000, disgorge the monetary benefit in the amount of $191,670, and serve a nine-month 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 trade date February 16, 2024, through November 16, 2024.