NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 12-8945-BC

NON-MEMBER:

TODD ESSE

EXCHANGE RULES:

NYMEX 533. SIMULTANEOUS BUY AND SELL ORDERS FOR DIFFERENT BENEFICIAL OWNERS (IN PART)

A member who is in possession of both buy and sell orders for different beneficial owners for the same product and expiration month, and, for a put or call option, the same strike price, may execute such orders for and directly between such beneficial owners provided that in pit trading, a member executing such orders shall first bid and offer by open outcry three times at the same price, stating the number of contracts, and, thereafter, if neither the bid nor the offer is accepted, the orders may be matched in the presence, and with the approval, of a designated Exchange official.

FINDINGS:

Pursuant to an offer of settlement that Todd Esse (“Esse”) presented at a hearing on June 24, 2013, in which Esse neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that Esse voluntarily submitted himself to the jurisdiction of the Panel for purposes of settling this matter and that on November 1, 2011, he possessed opposite orders for different beneficial owners and simultaneously placed those buy and sell orders totaling 2,984 contracts with entry time differentials of less than five seconds for the purpose of rebalancing funds between these accounts over which he had discretionary trading authority.

The Panel found that as a result of the foregoing, Esse violated Exchange Rule 533 (“Simultaneous Buy and Sell Orders for Different Beneficial Owners”).

PENALTY:

In accordance with the settlement offer, the Panel ordered Esse to pay a fine to the Exchange in the amount of $15,000. The Panel also suspended Esse 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 5 business days. The suspension will run from June 26, 2013 through July 2, 2013.

EFFECTIVE DATE:

June 26, 2013