The CFTC order, issued on January 4, 2006, finds that, on five occasions between November 2003 and March 2004, traders for STUSCO and STASCO prearranged trades for crude oil futures contracts. In each instance, according to the order, the traders prearranged the trade by agreeing in advance on the quantity and the settlement month, agreeing to take the opposite positions of the trade and executing the trade on the NYMEX. The order finds that Catterall was involved in the prearrangement of certain of these trades.
The CFTC order finds that the prearranged trades by the traders of STUSCO and STASCO, including Catterall, constituted fictitious sales in violation of the Commodity Exchange Act (CEA) and non-competitive transactions in violation of the CFTC’s regulations. The order also finds STUSCO and STASCO liable for their respective traders’ violations of the CEA and CFTC regulations.
The CFTC order directs STUSCO, STASCO, and Catterall to cease and desist from further violations of specified provisions of the CEA and comply with specified undertakings. The order also directs STASCO to pay a $200,000 civil penalty, and Catterall to pay a $100,000 civil penalty. Separately, NYMEX has taken disciplinary action against its member firm, STUSCO, and an employee of the firm. In consenting to the entry of the CFTC order, STUSCO, STASCO, and Catterall neither admitted nor denied the findings made in the order.
The Commission appreciates the assistance provided by NYMEX staff during the investigation of this matter. The following CFTC Division of Enforcement staff were responsible for this case: Manal Sultan, Eliud Ramirez, Jr., Nancy Gogel, Lenel Hickson, Jr., Stephen J. Obie, and Richard Wagner.
