NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

ROMAN BANOCZAY

NYMEX RULE VIOLATIONS:

RULE 575.A. DISRUPTIVE PRACTICES PROHIBITED

No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

RULE 432.L.2 GENERAL OFFENSES

It shall be an offense to fail to fully answer all questions or produce all books and records at such hearing or in connection with any investigation, or to make false statements;

FINDINGS:

On April 9, 2019, a Panel of the New York Mercantile Exchange (“NYMEX”) Probable Cause Committee (“PCC”) charged non-member, Roman Banoczay (“Banoczay”) with violating NYMEX Rules 575.A. and 432.L.2. based on allegations that between January 18, 2018 and February 12, 2018, Banoczay engaged in a pattern of disruptive trading in the MAR18 Crude Oil Futures market in which he entered Unintended Orders on one side of the market to induce other market participants to trade with smaller Intended Orders resting on the other side of the market. Once the Intended Order traded, Banoczay would cancel the Unintended Orders. Moreover, Banoczay refused to provide information requested by Market Regulation staff regarding this matter.

On June 7, 2019, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) entered an order finding that Banoczay failed to answer the charges issued against him. In failing to answer the charges, the Hearing Panel Chair further ordered that Banoczay was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

Pursuant to NYMEX Rule 407.C., a sanctions hearing was held before a Panel of the BCC (the “BCC Panel”) on June 26, 2019. The Panel found that Banoczay had committed violations of NYMEX Rules 575.A. and 432.L.2. and imposed the following sanctions on Banoczay: that Banoczay pay a fine of $100,000, disgorge profits in the amount of $118,599.34, and be permanently barred from (a) applying for Membership at any CME Group exchange; (b) access to any trading floor owned or controlled by CME Group; and (c) direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.

On July 4, 2019, Banoczay filed a Notice of Appeal of the BCC Panel’s June 26, 2019 decision. On August 29, 2019, the Appellate Panel Chair set a briefing schedule. Banoczay failed to file an appellate brief and, thus failed to comply with the Appellate Panel Chair’s order or NYMEX Rule 411. On March 4, 2020, the Appellate Panel affirmed the BCC Panel’s decision.

PENALTY:

In accordance with NYMEX Rule 411, the Appellate Panel ordered that Banoczay pay a $100,000 fine, disgorge profits in the amount of $118,599.34, and be permanently barred from (a) applying for Membership at any CME Group exchange; (b) access to any trading floor owned or controlled by CME Group; and (c) direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.