CFTC Files Suit Against the CME

CMEThe CFTC Thursday filed suit against the CME seeking civil monetary penalties and trading and registration bans for to CME employees, William Byrnes & Christopher Curtin for allegedly intentionally disclosing material non-public information pertaining to specific customer traders.

The suit alleges that from February 2008 to September 2010, Byrnes & Curtin intentionally disclosed material nonpublic information about CME NYMEX trading and customers to a commodity broker on nearly 80 occasions.

Full complaint from the CFTC is below:

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From the CFTC:

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.

Media Contacts
Dennis Holden
202-418-5088

 

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Comments

  1. So Jon Corzine isn’t in trouble, but these two Irish schmucks are?

    • Yeah, pretty much.  With the silver market being WILDLY manipulated via naked shorting and many other low-life tricks, this is the best that the CFTC can come up with?  Sheeeeooot!  Looks like a smoke-screen to me, ladies and gents.  This has all the ear-marks of a “LOOK, FOLKS, WE’RE ON THE JOB!” event.  Nothing to see here, move along, move along.  :-/
       

    • They are just doing something to respond to Elisabeth Warren’s accusations about not charging anyone.

      A nice, clean, neutral job, easy to control and limit at a nice distance from more vulnerable subjects.

  2. Big YAWN!!!!!

  3. Really Now? Please we want to see some arrests

  4. Anyone care  to guess how much the CME will be fined.  I’ll log in at $26,000,000.  Do I have inside intel. Hell no.  It’s just a tidy number significant of nothing. 

  5. Well said all, but at least if they get precedent with a small case it will be easier to rope in the big guys. But all this legal posturing is 2-4 years too late IMO.

  6. anyone who believes all these bastards aren’t in bed with each other are about on this guy’s level:
     
    https://www.youtube.com/watch?v=BvTNyKIGXiI
     

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