NOTICE OF DISCIPLINARY ACTION

MEMBER:

Robert Leeds

NYMEX RULE:

Rule 575. Disruptive Practices Prohibited (in part)

All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.

A. 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.

B. No person shall enter or cause to be entered an actionable or non-actionable message(s) with intent to mislead other market participants.

FINDINGS:

Pursuant to an offer of settlement in which Robert Leeds neither admitted nor denied the rule violation upon which the penalty is based, on December 14, 2021, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that on one or more occasions between May 2020, and August 2020, Leeds entered orders with the intent, at the time of order entry, to cancel the orders before execution or to modify the orders to avoid execution, in the Natural Gas and Crude Oil futures markets. Specifically, Leeds entered large orders or layered orders on one side of the market that he cancelled after receiving fills on the smaller order(s) he entered on the other side of the market.

During the same time period, Leeds entered actionable or non-actionable messages with the intent to mislead other market participants on one or more occasions in the Natural Gas and Crude Oil futures market. Specifically, Leeds placed a large order or layer of orders aggregating to a larger quantity on one side of the market and then cancelled those orders, while simultaneously aggressing into the same price at which his spoof order had been resting. Leeds then received fills of the aggressive orders.

The Panel found that as a result of the foregoing, Leeds violated NYMEX Rules 575.A. and 575.B.

PENALTY:

In accordance with the settlement offer and after considering Leeds’ financial condition, the Panel ordered Leeds to pay a $5,000 fine in connection with this case and companion case COMEX 20-1331-BC ($2,500 to NYMEX), disgorge $695.48 in profits, and serve a three month suspension to 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. The suspension shall run from December 16, 2021 through March 16, 2022, inclusive.