NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 10-7545-BC

MEMBER:

GARY MARCUS

NYMEX RULE VIOLATION:

521. Requirements for Open Outcry Trades (states in pertinent part)
In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader.

532. Disclosing Orders Prohibited
No person shall disclose another person's order to buy or sell except to a designated Exchange official or the CFTC, and no person shall solicit or induce another person to disclose order information. An order for pit execution is not considered public until it has been bid or offered by open outcry. No person shall take action or direct another to take action based on non-public order information, however acquired. The mere statement of opinions or indications of the price at which a market may open or resume trading does not constitute a violation of this rule.
 

539. Prearranged, Pre-negotiated and Noncompetitive Trades Prohibited

539.A. General Prohibition
No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction …

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.

FINDINGS:

Pursuant to an offer of settlement Gary Marcus (“Marcus”) presented at a hearing on February 12, 2013, in which Marcus neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that on four occasions in February 2009, Marcus traded Heating Oil futures spreads based on non-public information and participated in the execution of noncompetitive trades that he prearranged with another trader via Instant Messages (“IMs”). On two of these occasions, the trades were not properly executed via open outcry.

The Panel found that, as a result, Marcus violated Exchange Rules 521 (Open Outcry Trades), 532 (Disclosing Orders Prohibited), 539.A. (Prearranged Trades) and 432.B. (Just and Equitable Principles of Trade).

PENALTY:

In accordance with the settlement offer, the Panel ordered Marcus to pay a fine to the Exchange in the amount of $15,000. The Panel also suspended Marcus from all direct or indirect access to any trading floor or electronic trading or clearing platform owned or operated by CME Group Inc., including Globex, for a period of 15 business days. The suspension will run from February 14, 2013 through March 7, 2013.

EFFECTIVE DATE:

February 14, 2013