On August 4, the U.S. Commodity Futures Trading Commission (CFTC) announced that a judge had entered a consent order resolving charges against the New York Mercantile Exchange (NYMEX) and former employees William Byrnes and Christopher Curtin. The CFTC charged NYMEX, Byrnes, and Curtin with the repeated disclosure of material non-public information in violation of the Commodity Exchange Act (CEA) and CFTC regulations. The judge found Byrnes and Curtin directly liable for the disclosures and NYMEX vicariously liable. NYMEX, Byrnes, and Curtin are to pay a $4 million civil monetary penalty jointly and severally.
The order finds that, on multiple occasions from 2008 to 2010, Byrnes and Curtin willfully and knowingly disclosed material non-public information obtained through special access. The order also finds that they disclosed confidential information such as the identities of counterparties to crude oil options, natural gas futures trades, and trade details such as price and volume. Byrnes and Curtin made these disclosures while they operated in the scope of their employment for NYMEX. This case marks the first time the CFTC has charged an exchange with violations of the CEA and CFTC regulations’ proscriptions against disclosing material non-public information by exchange employees.
“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,” said Director of Enforcement James McDonald. “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.”
On August 6, the CFTC published a Notice of Covered Action in reference to the case. The notice signals that individuals who supplied information for the investigation should now submit whistleblower award claims. CFTC whistleblowers who provide the agency with original information that leads to a successful enforcement action are entitled to a monetary reward ranging from 10 to 30 percent of all money recouped by the government in the case.
The CFTC’s Press Release: NYMEX and Two Former Employees to Pay $4 Million for Disclosing Material Non-Public Information
The CFTC Notice of Covered Action: https://www.whistleblower.gov/notices/2020-012