NOTICE OF DISCIPLINARY ACTION

FILE NO.:

COMEX 10-04-BC
 

MEMBER:

William Squiers (SQR)
 

(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.
 

(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:

The New York Mercantile Exchange took final disciplinary action against William Squiers (also known as Broker Badge “SQR”) and hereinafter “Squiers”), a Member of the COMEX Division of the New York Mercantile Exchange. On January 25, 2011, the Hearing Panel Chairman of the COMEX Business Conduct Committee granted Market Regulation’s motion and held that, by failing to answer, all the charges against Squiers are deemed admitted and Squiers’ right to a hearing deemed waived. After a hearing on March 9, 2011, the COMEX BCC Panel (the “Panel”) found that Squiers engaged in the following conduct: (i) On May 22, 2008, Squiers executed a ten-lot, round-turn, noncompetitive, prearranged trade in Silver futures contracts for July 2008 delivery (SIN08) to accommodate the non-competitive, prearranged execution of another floor broker’s customer order to sell SIN08; and that in so doing, Squiers realized $600 in profits on this round-turn trade; (ii) On May 27, 2008, Squiers executed a nineteen-lot, round-turn, noncompetitive, prearranged trade to accommodate the noncompetitive, prearranged execution of another floor broker’s customer order to sell SIN08; and that in so doing, Squiers realized $525 in profits on this round-turn trade; and (iii) On June 3, 2008, Squiers executed a ten-lot, round-turn, noncompetitive, prearranged trade to accommodate the noncompetitive, prearranged execution of another floor broker’s customer order to sell SIN08; and that in so doing, Squiers realized $125 in profits on this round-turn trade. Accordingly, the Panel found that in doing so, Squiers violated legacy COMEX Rules 104.21, 104.27, and legacy Exchange Rule 8.55(A)(7).
 

PENALTY:

In accordance with its findings, the Panel ordered that Squiers (i) pay a fine to the Exchange in the amount of $35,000; (ii) disgorge profits in the amount of $1,250; (iii) Cease and Desist from subsequent similar rule violations; and (iv) accept a six (6) week suspension of Exchange membership and trading privileges, which includes: (a) access to, and the ability to work in any capacity on, any CME Group Exchange Trading Floor, and (b) direct access to CME Group electronic trading and clearing platforms, starting the first business day after the Effective Date. This decision became final on March 11, 2011 and effective on April 18, 2011.  

EFFECTIVE
DATE:

April 18, 2011