NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 10-01-BC

CLERK:

JOHN KOZLIK
 

(LEGACY) NYMEX RULES:

6.11 Confirmation of Trades Executed on the Trading Floor

(B) Each Trading Member executing a purchase or sale, on the Exchange trading floor, or his designated authorized representative, shall be responsible for assuring that such Member’s transactions are properly assigned to the appropriate Clearing Member prior to his leaving the premises of the Exchange.

6.30 Access to the Trading Floor

(B)(4) No floor employee of a Member may trade in any commodity contract traded on or cleared by this Exchange either in his own name or in an account in which he has direct or indirect interest.
 

(LEGACY) EXCHANGE RULES:

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[:],

(2) to be guilty of fraud or any act of bad faith;

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[:],

(3) to be guilty of dishonest conduct;

FINDINGS:

The New York Mercantile Exchange took final disciplinary action against John Kozlik (also known periodically as COMEX Lessee “KOZ” and hereinafter “Kozlik”), a clerk employed by a Member of the NYMEX Division. Kozlik failed to timely file an answer to the Charging Memorandum, and this failure was deemed an admission to all of the charges alleged and a waiver of his right to a hearing on the charges. Accordingly, the NYMEX BCC Panel found that between October 12 and 17, 2006, Kozlik failed to properly allocate Heating Oil futures trades executed by a Member, traded NYMEX commodity futures for his personal account while working as a clerk on the NYMEX floor, and allocated NYMEX futures trades to his personal account on multiple occasions; and on October 13, 2006, Kozlik reallocated NYMEX futures trades that were originally intended for a customer order to his personal account. Kozlik’s account profited by $3,234, while a customer order was disadvantaged by $378. In so doing, Kozlik violated the following legacy rules: NYMEX Rules 6.11(B), 6.30(B)(4), and Exchange Rules 8.55(A)(2) and 8.55(A)(3).

PENALTY:

The NYMEX BCC Panel ordered that Kozlik, (1) pay a fine in the amount of $50,000 to the Exchange; (2) pay restitution in the amount of $378; (3) be permanently barred from reapplication for clerk or for membership privileges, including but not limited to, access to any CME Group trading floor and direct access to any CME Group electronic trading or clearing platforms; and (4) accept an order to cease and desist from subsequent similar rules violations. The decision became final on July 27, 2010 and effective on August 30, 2010.
 

EFFECTIVE DATE:

August 30, 2010