NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 10-03-BC

MEMBER:

Kevin McDonnell (KMAC)
 

(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.

(18) to commit an act which is substantially detrimental to the interests or welfare of the Exchange.

8.55 Classification of Offenses

(B) Minor 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 minor offenses of the Exchange.

(10) Supervision.
(a) to fail to supervise any employee of a Member or Member Firm adequately to prevent violations of Exchange Rules by such employee.

FINDINGS:

Pursuant to an offer of settlement in which Kevin McDonnell (also known by badge “KMAC” and hereinafter “McDonnell”), a Member of the NYMEX Division neither admitted nor denied the findings, a panel of the NYMEX Business Conduct Committee (“hereinafter known as the “BCC Panel”), found that between November 2004 and December 2005, McDonnell failed to supervise individuals who traded NYMEX Crude Oil (“CL”) futures while working as his NYMEX floor clerks; and on September 16, 2005, McDonnell discussed and advocated conduct by his employees that was in violation of accepted trading principles over NYMEX Exchange floor and office phone lines and NYMEX Europe Limited phone lines. The BCC Panel found that McDonnell, therefore, violated legacy Exchange Rules 8.55(A)(18), and 8.55(B)(10)(a). The BCC Panel accepted the terms of the offer at a BCC hearing held on April 26, 2011.

PENALTY:

In accordance with the settlement offer and its findings, the BCC Panel ordered that McDonnell (i) pay a fine in the amount of $35,000 to the Exchange; (ii) accept a suspension of his membership privileges including access to any CME Group trading floor and direct access to any CME Group electronic trading or clearing platforms for a period of two (2) weeks, starting on May 15, 2011 and terminating on May 29, 2011; and (iii) agree to the entry of an order to cease and desist from subsequent similar rules violations. The decision became final on May 4, 2011 and effective on May 6, 2011.

EFFECTIVE
DATE:

May 6, 2011