CFTC CHARGES NYMEX WITH DISCLOSING NONPUBLIC INFORMATION

(The following is a reformatted version of a press release
issued by The U.S. Commodity Futures Trading Commission and
received via electronic mail. The release was confirmed by the
sender.) 
CFTC Media Contacts: Dennis Holden (202) 418-5088 • Steven
Adamske (202) 418-5080 
For Release: February 21, 2013 
CFTC Charges CME Group’s New York Mercantile Exchange and Two
Former Employees with Disclosing Material Nonpublic Information
about Customer Trades 
Washington, DC - The U.S. Commodity Futures Trading Commission
(CFTC) today filed an enforcement action charging the New York
Mercantile Exchange, Inc. (CME NYMEX), which is owned and
operated by the CME Group, and two former CME NYMEX employees,
William Byrnes and Christopher Curtin, with violating the
Commodity Exchange Act and CFTC Regulations through the repeated
disclosures of material nonpublic customer information over of
period of two and one-half years to an outside commodity broker
who was not authorized to receive the information. 
The CFTC’s Complaint, filed on February 21, 2013, in the U.S.
District Court for the Southern District of New York, alleges
that Byrnes and Curtin worked on the CME ClearPort Facilitation
Desk and were responsible for facilitating customer transactions
reported for clearing through the CME ClearPort electronic
system.  The Complaint alleges that at least from in or about
February 2008 to September 2010, Byrnes knowingly and willfully
disclosed material nonpublic information about CME NYMEX trading
and customers, including about trades cleared through CME
ClearPort, to a commodity broker on at least 60 occasions.  The
Complaint further alleges that between May 2008 and March 2009,
Curtin knowingly and willfully disclosed the same type of
information to the same commodity broker on at least 16
additional occasions.  The nonpublic customer information
unlawfully disclosed by Byrnes and Curtin in conversations --
often captured on tape -- included details of recently executed
trades, the identities of the parties to specific trades, the
brokers involved in trades, the number of contracts traded, the
prices paid, the structure of particular transactions, and the
trading strategies of market participants, according to the
Complaint. 
The Complaint alleges that the CME NYMEX and the two former
employees violated the Commodity Exchange Act and CFTC
Regulations, which specifically prohibit the disclosures of this
type of customer information. 
The CFTC’s Complaint also alleges that in July 2009, a market
participant complained to CME NYMEX that the participant
believed nonpublic information about trades cleared through CME
ClearPort had been disclosed by a CME NYMEX employee named
“Billy.”  Although a CME NYMEX Managing Director who
investigated the market participant’s complaint identified
“Billy” to be William Byrnes, CME NYMEX did not then question
Byrnes, and Byrnes’s illegal disclosures continued for over a
year, until at least September 2010.  Ultimately, CME NYMEX
terminated Byrnes’s employment in December 2010 after yet
another market participant complained to CME NYMEX about
disclosures of nonpublic customer information.  Curtin had
previously left CME NYMEX voluntarily. 
In its continuing litigation, the CFTC seeks civil monetary
penalties, trading and registration bans, and a permanent
injunction prohibiting further violations of the federal
commodities laws, as charged. 
CFTC Division of Enforcement staff responsible for this case
include Patrick Daly, James Wheaton, David W. MacGregor, Lenel
Hickson, Stephen J. Obie, and Vincent A. McGonagle.
This inbox is unattended; please do not reply to this email.
Please contact the CFTC Office of Public Affairs at 202-418-5080
with any questions. 
(bjh) NY 
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