NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Laszlo Polszter

NYMEX RULE VIOLATIONS:

Rule 432 General Offenses (in part)

It shall be an offense:

B.1. To engage, or attempt to engage, in fraud or bad faith.

B.2. To engage in conduct or proceedings inconsistent with just and equitable principles of trade.

G. To pre-arrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.

L.1. To fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

FINDINGS:

On July 14, 2020, the CME Group Chief Regulatory Officer (“CRO”) charged non-member Laszlo Polszter (“Polszter”) with violating NYMEX Rules 432.B.1., 432.B.2., 432.G. and 432.L.1. based on allegations that on numerous occasions between September 27, 2018 and March 21, 2019, Polszter prearranged the execution of transactions in various Weekly Crude Oil Options for the purpose of transferring equity from Polszter’s client accounts to his personal account. Further, Polszter failed to appear before Exchange staff for a scheduled interview.

On October 6, 2020, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) first determined that Polszter, having failed to submit a written answer to the charges issued against him, was deemed to have admitted the charges. Polszter, therefore, waived his right to a hearing on the merits of the charges. Pursuant to NYMEX Rule 408.F., a BCC Panel then found Polszter guilty of committing the admitted charges and held a penalty hearing thereafter.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Polszter to pay a fine in the amount of $100,000, to pay restitution in the amount of $32,500, jointly and severally with Laszlo Balogh and Peter Ormandi, and permanently barred his access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.