November 12, 2019

November 11, 2019

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CME Adopts Rule Changes Regarding Offenses

CME has issued a Special Executive Report listing out amendments to Rule 432 (General Offenses) of the CME, CBOT, NYMEX, COMEX, and CME SEF rulebooks. These amendments are aimed at specifically prohibiting:

  • attempted fraudulent or bad faith actions;

  • the intentional or reckless use or attempted use of a manipulative device, scheme or artifice to defraud; and

  • the intentional or reckless delivery or attempt to deliver false, misleading or inaccurate information that may affect prices.

These rule amendments were adopted at the request of the CFTC, and are meant to track the prohibitions listed in CFTC Regulation 180.1. The amendments, which expand CME’s enforcement power to punish and deter market participants engaging in misconduct, are set to take effect on February 16, 2017.

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James Kwok, Covington Burling, Corporate Lawyer, Investment Banking
Associate

James Kwok provides advice to financial institutions, asset managers and commercial entities with respect to derivatives. He also regularly represents clients on a wide range of regulatory and policy matters, including with respect to federal securities law, the Investment Advisers Act, and the Commodity Exchange Act.

Mr. Kwok also has passed all three levels of the Chartered Financial Analyst exams.

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Anne M. Termine, Covington, securities litigation attorney
Of Counsel

Anne Termine is a member of the firm’s Global Futures and Derivatives Practice and leads the Derivatives Enforcement Team. She is also a member of the white collar defense and investigations practice. Ms. Termine advises clients in handling internal investigations and regulatory enforcement inquiries related to the derivatives markets and the cryptocurrency markets.

Prior to joining Covington, Ms. Termine was a Chief Trial Attorney in the U.S. Commodity Futures Trading Commission's (CFTC) Division of Enforcement, where she was responsible for investigating and prosecuting alleged violations of federal laws dealing with commodities, futures, options, swaps, and other derivatives. While in this role, Ms. Termine designed and led the CFTC’s landmark enforcement program involving the manipulation and false reporting of LIBOR, Euribor and TIBOR - critical, international benchmark interest rates. She spearheaded negotiations that resulted in settlements with nine international financial institutions, imposing penalties totaling over $2.8 billion. In managing this massive, global investigation, Ms. Termine was instrumental in developing relationships and coordinating with diverse foreign regulatory and law enforcement agencies throughout Europe and Asia, as well as with divisions of the United States Department of Justice and a coalition of over 40 State Attorneys General. She received the Chairman’s Award for Excellence, the CFTC’s highest award, for her work on and leadership in handling the LIBOR investigations.

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Stephen Humenik, regulatory and public policy lawyer, Covington
Of Counsel

Stephen M. Humenik leads the firm’s futures and derivatives practice. He has extensive experience on cross-border regulatory, compliance and enforcement matters involving the U.S. Commodity Futures Trading Commission (CFTC) and markets for derivatives and physical and financial commodities. Mr. Humenik applies his business, operational, and government experience to the implementation of CFTC regulations, including the registration, trading, clearing and other compliance obligations of the Dodd-Frank Act and other global regulatory reforms.

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