CHICAGO Feb 3 CME Group Inc has asked a
U.S. judge to toss out charges brought by regulators alleging
that the exchange operator is liable for two former employees
accused of leaking details on clients' trades.
CME Group, in court documents filed on Friday, said the U.S.
Commodity Futures Trading Commission was wrong to seek damages
from the company in a civil lawsuit filed last year.
The commission in 2013 charged CME Group's New York
Mercantile Exchange (Nymex) and two former employees, William
Byrnes and Christopher Curtin, with disclosing private
information about trading in its energy markets to a commodities
broker from 2008 to 2010.
CME said in its filing that the commission never alleged any
misconduct by Nymex. Instead, the commission's complaint makes
clear that the conduct was harmful to Nymex, according to CME.
"This court should dismiss the CFTC's novel attempt to hold
Nymex liable for misconduct that was contrary to Nymex's
policies and Nymex's interests," the company's filing said.
The commission's lawsuit against CME was striking because
the exchange operator is an important supervisor in the U.S.
self-regulatory system. It had quoted a Nymex official who said
that maintaining the confidentiality of nonpublic information
was the "lifeblood" of an exchange.
In its filing, CME sought to distance the two former
exployees' alleged actions from Nymex, saying Byrnes and Curtin
"did not nourish the exchange's lifeblood. They poisoned it."
Lawyers for Byrnes and Curtin in separate court documents
have denied the commission's charges.
The commission declined to comment.
CME discovered in December 2010 that Byrnes had disclosed
confidential Nymex customer information to broker Ron Eibschutz
to help Eibschutz drum up business, according to CME's filing.
The company said it immediately fired Byrnes and reported his
misconduct to the commission.
The commission then initiated an investigation, during which
the company learned that Curtin had taken part in similar leaks,
according to court documents. CME also reported Curtin's
misconduct to the commission, the filing said.
"The CFTC suggests that Nymex could have or should have done
more to discover its employees' misconduct," CME said. "Those
allegations are simply gratuitous."
The CFTC said last year that CME had reviewed Byrnes's phone
calls and emails from just one day after receiving a complaint
that a person called "Billy" - Byrnes's nickname - had disclosed
But CME did not question Byrnes, who continued disclosing
information until a market party also complained, and then fired
Byrnes, the commission's lawsuit said. The company had, in the
meantime, promoted Byrnes to teach employees on confidentiality
policies, according to the complaint.
CME, which bought Nymex in 2008, said last year that no
customers or markets were hurt by the alleged leaks.
The broker, Ron Eibschutz, did not respond to a request for
The case is U.S Commodity Futures Trading Commission v.
Byrnes et al, U.S. District Court, Southern District of New
York, No. 13-cv-01174.