CFTC Fines NYMEX Former Staff for Internal Trading

CFTC has fined the New York Mercantile Exchange (NYMEX) floor broker and its two former employees for the disclosure of sensitive trading information.

05 August, 2020 | AtoZ Markets – NYMEX is a CFD exchange located in New York. The exchange offers to trade commodity futures contracts, swaps and options contracts. It also provides trading services in the energy, agriculture and metal sectors. However, CME Group of Chicago owns and operates NYMEX since 2008.

NYMEX Settles With CFTC Over Alleged Data Leaks

The Commodity Futures Trading Commission or CFTC has fined NYMEX and ex-employees William Burns and Christopher Curchin. Barnes, Curchin and NYMEX have jointly agreed to pay a fine of $4 million, with Burns’s share limited to $300,000 and Curtin’s share limited to $200,000, the settlement order said. The two were also banned from futures trading.

According to the settlement, between 2008 and 2010, Mr. Burns and Mr. Curtin had leaked information to client Mr. Eibschutz about oil and gas options trades, including the identities of the companies with which they did certain transactions. Such data can be useful to brokers to drive their business. It also provides in-depth information about the market activity to its customers. However, the regulator already added Eibschutz as a subject of civil action.

William Byrnes and Christopher Curtin, revealed “the identities of counterparties to specific options trades, whether a particular counterparty purchased or sold the option, whether it was a call or a put, the volume of contracts traded, the expiry, the strike price, and the trade price,” according to the proposed settlement order.

Defendants have neither acknowledged nor denied the CFTC’s allegations. According to the settlement, Nymex fired Mr. Burns in 2010, and Mr. Curtin retired from the exchange in 2009.

“Today’s settlement sends a strong message that the CFTC will work tirelessly to protect our market participants against unlawful disclosures of their confidential information to ensure that the fairness and reliability of our markets are not compromised,” James McDonald, CFTC’s director of enforcement said. “Like any other employer, commodity exchanges are also responsible for violations of the CEA or CFTC regulations by their officials, employees, and agents within the scope of their employment or office.”

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