NOTICE OF DISCIPLINARY ACTION

MEMBER:

INTL FCSTONE FINANCIAL INC.

NYMEX RULE VIOLATIONS:

432. GENERAL OFFENSES

It shall be an offense:

W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

534. WASH TRADES PROHIBITED

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

FINDINGS:

Pursuant to an offer of settlement, INTL FCStone Financial Inc. (“FCStone Financial”) presented at a hearing on November 1, 2017, in which FCStone Financial neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the New York Mercantile Exchange Business Conduct Committee (“BCC”) found that between December 2014 and January 2016, a FCStone Financial trader entered numerous wash trades in Crude Oil and New York Harbor ULSD Futures contracts between accounts with the same beneficial owner. FCStone Financial failed to provide instruction or guidance to its trader on Exchange rules and regulations, specifically with regard to wash trades, as well as failed to supervise the trading activity of its trader to ensure compliance with
Exchange rules.

The Panel found that as a result, FCStone Financial violated Rules 432.W and 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered FCStone Financial to pay a fine to the Exchange in the amount of $90,000.