You are here

CFTC sues Nymex over information leaks

Section: Daily Dispatches

By Kara Scannell
Financial Times, London
Thursday, February 21, 2013

WASHINGTON -- The Commodity Futures Trading Commission is suing the New York Mercantile Exchange, a unit of CME Group, and two former employees for allegedly giving secret customer trading information to an external broker.

The case is the first time the CFTC has sued Nymex since the 1980s, an official said. It reflects a growing push by regulators to hold exchange operators responsible for alleged misconduct.

The CFTC alleges that from early 2008 until November 2010 William Byrnes and Christopher Curtin, the former employees on CME ClearPort Facilitation Desk, provided a broker with order flow information, including "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."

... Dispatch continues below ...


How to profit in the new year with silver --
and which stocks to buy now

Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million.

Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets.

To learn about this report, please visit:

CME Nymex was accused of failing to fully investigate a 2009 customer complaint alleging that someone named "Billy" was divulging customer information. Mr Byrnes was identified by the exchange but was never questioned, the CFTC alleges.

It was only after a second complaint, the CFTC alleges, that the CME investigated and fired Mr Byrnes.

Mr Curtin is now vice-president of the control desk, a customer relations platform, for ELX Futures. A spokeswoman for ELX had no immediate comment. Mr Byrnes could not be immediately reached for comment.

The CME said the lawsuit was "disappointing because it relates to incidents that CME Group has already addressed and handled appropriately, and involved no harm to any customer or the markets."

It added that it had fired the relevant employees after its own review in 2010, but the CME did not address the CFTC claim that it did not act when first alerted to the possible wrongdoing a year earlier.

CME said: "We simply do not believe the CFTC's claims in this case are fair to Nymex."

The Nymex energy exchange hosts flagship contracts including US crude, natural gas, and heating oil futures. Its ClearPort platform processes swaps derivatives, largely in energy, for backing by the exchange clearinghouse.

CME acquired Nymex in August 2008.

The CME ClearPort desk is responsible for facilitating customer transactions reported for clearing.

The Securities and Exchange Commission sued NYSE Euronext last year for giving customer flow information to some clients over others. NYSE paid a $5 million penalty, the first time in its history, to settle, without admitting or denying wrongdoing.

In November 2012 CME sued the CFTC in a rare legal move as it sought the right to bundle trade reporting for swaps with other services, calling a pending commission rule "arbitrary and capricious."

The exchange operator withdrew the suit after CFTC dropped its insistence that swaps traders be given a choice of venues to report their transactions.

* * *

Join GATA here:

California Resource Investment Conference
Saturday-Sunday, February 23-24, 2013
Hyatt Regency Indian Wells Resort and Spa
Palm Desert, California

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

Or by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:


GoldMoney adds Singapore vaulting option

In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To find out more about the new vault, please visit:

GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults.

It's easy to open an account, add funds, and liquidate your investment. For more information, visit: