NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 13-9479-BC

NON-MEMBER:

STEPHEN MURPHY

NYMEX RULE VIOLATIONS: Rule 432. General Offenses (in part)

It shall be an offense:

B.2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;

Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;

T. to engage in dishonorable or uncommercial conduct.

FINDINGS:

Pursuant to an offer of settlement Stephen Murphy (“Murphy”) presented at a hearing on August 20, 2014, in which Murphy neither admitted nor denied the findings or rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that Murphy was subject to the jurisdiction of the Exchange pursuant to Rules 402 and 418, and that for a period of approximately two weeks in May 2013 and June 2013, Murphy engaged in a pattern of activity in which he entered and cancelled orders in the Platinum and Palladium futures markets without the intent to trade. Specifically, the Panel found that Murphy attempted to better the existing bid or offer by entering multiple 1-lot orders at various prices on one side of the market which had the effect of narrowing the bid/ask spread and created the appearance of an imbalance in buy/sell pressure. Murphy would then enter an order on the opposite side of the market, again narrowing the bid/ask spread, which resulted in an execution of that most recent order against other market participants. After receiving a fill on this bid/offer, Murphy then canceled all of the resting orders he had previously entered on the opposite side of the order book, generally within one second or less. Murphy would then repeat the process on the other side of the market.

The Panel found that as a result, Murphy violated NYMEX Rules 432.B.2., 432.Q, and 432.T.

PENALTY:

In accordance with the settlement offer, the Panel ordered Murphy to pay a fine to the Exchange in the amount of $25,000 and serve a one week suspension of any access to any CME Group Inc. trading floor and of direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc., including CME Globex. The suspension shall run from August 22, 2014 through August 28, 2014 inclusive.

EFFECTIVE DATE:

August 22, 2014