NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 09-15-BC
 

MEMBER:

MICHAEL CARDELFE (MFC)

(LEGACY) NYMEX RULES AND REGULATION:

8.55(A)(23)(a) 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.

(23) Supervision

(a) To fail to supervise any employee of a Member or Member Firm adequately to prevent the violation by such employee of any Exchange Rule that: (i) results in substantial detriment to the welfare and interests of the Exchange; (ii) results in harm to a customer or another Member or Member Firm; or (iii) otherwise constitutes a Major Offense.

FINDINGS:

The New York Mercantile Exchange took final disciplinary action against Michael Cardelfe, (also known as Broker “MFC”, and hereinafter known as “Cardelfe”), a NYMEX Division member. The subject matter of the disciplinary action concerned allegations that between October 2007 and December 2007 Cardelfe failed to supervise a clerk registered to him on the NYMEX, and who was registered with the NFA as an Introducing Broker (“IB”), when the clerk “cherry-picked” legitimate favorable trades intended for the clerk’s IB customers and then allocated those trades to his brother’s account. The clerk’s brother was a NYMEX member. Cardelfe submitted a Supported Offer of Settlement (“Offer”) without admitting or denying the rule violations upon which the penalty is based. In submitting this Offer, Michael Cardelfe consented to findings by the Business Conduct Committee that he violated Exchange Rule 8.55(A)(23)(a): Major Offense: Failure to Supervise.

PENALTY:

The Offer consisted of an Order to pay a fine of $25,000 and an Order to cease and desist from future violations of similar rules. The Offer terms for Exchange Docket No. 09-15 were accepted by a NYMEX Business Conduct Committee after a settlement hearing on January 13, 2010.

EFFECTIVE DATE:

March 24, 2010