By Kara Scannell
Financial Times, London
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."
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.
Read more here
By Kara Scannell
Financial Times, London
Thursday, February 21, 2013
http://www.ft.com/intl/cms/s/0/11e8490e-7c5d-11e2-91d2-00144feabdc0.html
