NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Libin Zhou

EXCHANGE RULES:

Rule 432. General Offenses (in part)

It shall be an offense:

B. 1. to engage in fraud or bad faith;

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

G. to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts;          

L.2. to fail to fully answer all questions and produce all books and records at such hearing or in connection with any investigation, or to make false statements;

FINDINGS:

On February 26, 2015, a Panel of the New York Mercantile Exchange (“NYMEX”) Probable Cause Committee charged non-member Libin Zhou (“Libin”) with violating NYMEX Rules 432.B.1., 432.B.2., 432.G., and 432.L.2. based on allegations that on 48 occasions during the time period of May 2013 through June 2013, Libin bought and sold 1 or 2 lot round-turn trades in back-month Crude Oil futures opposite an account owned by his employer, resulting in the transfer of $24,580 from his employer’s account to his personal account.  Libin  made several material misstatements during the course of interviews conducted by Market Regulation in connection with this matter.

On July 27, 2015, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) entered an order finding that Libin failed to answer the charges against him. The Hearing Panel Chair further ordered that Libin was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

On September 9, 2015, a penalty hearing was held before a panel of the NYMEX BCC (“BCC Panel”) which found that Libin had committed the violations charged.

PENALTY:

In accordance with NYMEX Rule 402.B (Sanctions), the BCC Panel ordered Libin to (1) pay a fine in the amount of $100,000; 2) pay restitution in the amount of $24,580; and (3) to be permanently banned from (a) applying for Membership at any CME Group exchange; (b) direct or indirect access to any trading or clearing platform owned or controlled by the CME Group, Inc.; and (c) access to any trading floor owned or operated by any CME Group, Inc. exchange.