The US Commodity Futures Trading Commission (CFTC) has received court approval for imposing a $4 million fine on the New York Mercantile Exchange (NYMEX) and on two former employees – William Byrnes and Christopher Curtin.
As announced earlier today, the former employees repeatedly disclosed non-public information, thus, violating the Commodity Exchange Act (CEA) and CFTC regulations. The exchange was charged for its liability for the misconduct of its employees.
Out of the total civil penalty, the majority has been imposed on the exchange while the liability for Byrnes and Curtin has been capped at $300,000 and $200,000 respectively.
“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.
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“Like any other employer, commodity exchanges are responsible for violations of the CEA or CFTC regulations by their officials, employees, and agents within the scope of their employment or office.”
Creating an Unfair Advantage in the Market
The press release detailed that Byrnes and Curtin ‘willfully and knowingly’ disclosed non-public information obtained through special access between 2008 and 2010. This was under the scope of their employment with the NYMEX. It has been declared that they passed information like identities of counterparties in crude oil options, natural gas futures trades, and other trade details to commodities broker and defendant Ron Eibschutz.
The CFTC has already brought a lawsuit against Eibschutz for his misconduct.
In addition to the penalty, the two employees were also permanently banned from trading commodity interests and registering with the CFTC.