NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 12-9093-BC

NON-MEMBER:

GREGOIRE KERNEIS

EXCHANGE RULES:

Rule 534. Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

 

FINDINGS:

Pursuant to an offer of settlement that Gregoire Kerneis (“Kerneis”) presented at a hearing on July 31, 2013, in which Kerneis neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that Kerneis was subject to the jurisdiction of the Exchange because at the time of the transactions at issue, he was an employee of BNP Paribas SA London Branch, an affiliate of a NYMEX member and that on April 17, 2012, he entered a series of four buy and sell orders in MAY12 Crude within five seconds of one another between accounts with the same beneficial owner, resulting in four trades for a total of 450 lots. In each of the four instances, Kerneis was the sole decision maker for both the buy and sell side of the trade.

The Panel found that as a result of the foregoing, Kerneis violated Exchange Rule 534.

 

PENALTY:

In accordance with the settlement offer, the Panel ordered Kerneis to pay a fine to the Exchange in the amount of $10,000. The Panel also suspended Kerneis 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 August 2, 2013 to August 8, 2013, inclusive.

 

EFFECTIVE DATE:

August 2, 2013