The US regulator, the Commodity Futures Trading Commission (CFTC), has recently received approval from the court to impose a fine worth $4 million. This fine is against the New York Mercantile Exchange (NYMEX), as well as two former employees within it: Christopher Curtin and William Byrnes.
$4 Million Fine For Insider Trading
As the Tuesday announcement specified, both Curtin and Byrnes repeatedly disclosed non-public information material. This stands in direct violation of the CFTC’s regulations, as well as the Commodity Exchange Act (CEA). In regards to the exchange, the CFTC charged NYMEX for its liability regarding its former employees’ misconduct.
In regards to the total civil penalty, the major part of it has been imposed by the exchange itself. Byrnes and Curtin managed to get away with a hefty fine regardless, however, as Curtin is mandated to pay $200,000 in liability, and Byrnes needs to fork over $300,000.
Keeping The US Markets Safe
James McDonald, the Director of Enforcement at the CFTC, was quick to praise his employer when it comes to this. He stated that this settlement stands as a “strong message” that the CFTC is tireless in its efforts to protect the US market participants. In particular, McDonald cited its protection of unlawful disclosure regarding confidential information, in order to ensure that reliability and fairness within the US market remain uncompromised.
McDonald further highlighted that commodity exchanges are just as responsible as any other employer, should their officials, agents, or employees violate the CFTC’s regulations or the CEA.
Divulging Oil and Natural Gas Insider Information
The press release went into detail about the violations. It explained that both Curtin and Byrns disclosed non-public information they gained through special accesses. They did so knowingly and willfully, doing so within the years of 2008 and 2010, when they were employed by NYMEX. In particular, they passed information such as counterparty identities regarding natural gas futures and crude oil options trades. Alongside this, they divulged other forms of trade details to Ron Eibschutz, a commodities broker and defendant in this case.
Eibschutz is already involved with a lawsuit against the CFTC for the misconduct perpetrated within this case. Both Curtis and Byrnes have officially been banned from registering with the CFTC or trading in commodity interests.
With the sheer amount of money flowing through the finance industry at any given moment, it’s natural for criminal elements to start popping up. It’s the job of the CFTC and other regulators to ensure the market stays as healthy as possible.