NOTICE OF DISCIPLINARY ACTION

FILE NO.:

COMEX 10-04-BC
 

MEMBER:

STUART LEBOWITZ (LEBO)
 

(LEGACY) COMEX RULES:

104.21 Open Outcry

Except to the extent otherwise permitted by the By-Laws and Rules, every order to buy or sell, and every purchase and sale of, a futures contract or futures option must be offered or executed openly and competitively by public outcry in a ring during the hours specified in the By-Laws and Rules.

104.27 Prearranged Trades

Except to the extent permitted by the By-Laws and Rules, members are prohibited from making, or attempting to make, any purchase or sale of a futures contract or futures option which directly or indirectly has been pre-arranged.

104.80 Trading Cards

(a) General Requirements: A floor member shall prepare trading cards on pre-printed and pre-sequenced forms issued or approved by the Exchange on which the floor member shall record, in non-erasable ink, in sequential order without skipping any trade entry lines, each price indication he has announced (during the pre-opening market indication period) and each transaction he has executed, in the exact chronological order of execution, provided that if additional trade type information is required by the By-laws or Rules of the Exchange, such as in the case of transactions involving execution of a differential, exchanges for physicals and cabinet trades, serial trade entry lines may be used to record the transaction as a whole. In addition, any floor member who has placed a verbal order with another floor member for execution as a CTI #3 trade, other than an order for one or more legs of a spread transaction in which the initiating floor member has personally executed at least one leg of the spread, shall simultaneously record the terms of the order and its time of placement on his trading card, in non-erasable ink, if he has not prepared a memorandum of the terms of such order in accordance with Rule 104.81(b).
 

(LEGACY) EXCHANGE RULE:

8.55 Classification of Offenses

(A) Major Offenses: No Member, Member Firm, or any employee of the foregoing shall commit a violation of any of the following rules, which shall be deemed major offenses of the Exchange[:],

(7) to engage in wash trading or accommodation trading.

FINDINGS:

Pursuant to an Offer of Settlement in which Stuart Lebowitz (also known as broker “LEBO”) neither admitted or denied the findings or any rule violations, a panel of the COMEX Business Conduct Committee (hereinafter known as the “BCC Panel”), found that Stuart Lebowitz failed to offer and execute Silver futures orders openly and competitively on May 28 and June 4, 2008; prearranged trades in Silver futures on May 28 and June 4, 2008; had trading card violations on May 28, 2008; and engaged in accommodation trading of Silver futures on May 28 and June 4, 2008 in violation of legacy COMEX Rules 104.21, 104.27, 104.80(a), and legacy Exchange Rule 8.55(A)(7). On August 12, 2010, Stuart Lebowitz and the Market Regulation Department presented a joint settlement offer, under terms that were revised at the meeting, to the BCC Panel, with respect to violations of Exchange Rules. The BCC Panel accepted the revised settlement offer. 

PENALTY:

In accordance with the settlement offer, the BCC Panel hereby orders that Stuart Lebowitz: (1) pay a fine to the Exchange in the amount of $22,500; (2) agree not to re-apply to the Exchange in any capacity for a period of two months from the latter of the date on which the acceptance of the Offer becomes final or from the time that the fine is paid in full; and (3) an order to cease and desist from subsequent similar rule violations. The decision became final on August 25, 2010 and effective on August 27, 2010.

Mr. Lebowitz must not re-apply to the Exchange in any capacity from August 25, 2010 through October 25, 2010.
 

EFFECTIVE DATE:

August 27, 2010