NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX-10-07547-BC

MEMBER:

JOSEPH CATALANO 
 

EXCHANGE RULES:

NYMEX RULE 432 - GENERAL OFFENSES

It shall be an offense:
B. to engage in fraud, bad faith or in conduct or proceedings inconsistent with just and equitable principles of trade;
C. to engage in dishonest conduct;
Y. to improperly use the Globex platform or any electronic trading or clearing platform owned or controlled by CME Group or permit the unauthorized use of such platforms.

 
FINDINGS:

On February 12, 2012, a Panel of the New York Mercantile (“NYMEX”) Probable Cause Committee charged Joseph Catalano (“Catalano”), a Member, with violating NYMEX Rules 432.B, 432.C and 432.Y based on allegations that for the time period January 2009 to September 2009, Catalano allocated unprofitable natural gas futures trades into the accounts of three NYMEX brokers without their authorization or knowledge, resulting in a loss of $8,220 to their accounts.
 

On April 10, 2012, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) entered an order finding that Catalano failed to answer the charges against him. The Hearing Panel Chair further ordered that Catalano was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

On May 15, 2012, a penalty hearing was held before a panel of the NYMEX BCC (“BCC Panel”) which found that Catalano had committed the violations charged.

PENALTY:

In accordance with NYMEX Rule 402.B. (Sanctions), the BCC Panel ordered that Catalano (a) pay a fine in the amount of $75,000; (b) pay restitution in the amount of $8,220 and (c) be permanently banned from (i) applying for Membership at any CME Group Exchange; (ii) direct or indirect access to any trading or clearing platform owned or controlled by the CME Group, Inc.; and (iii) access to any trading floor owned or operated by any CME Group, Inc. exchange.

EFFECTIVE DATE:

June 18, 2012