Former Delta Fuel Trader Banned, Fined

By Christian Berthelsen 

A former Delta Air Lines Inc. fuel trader was banned from trading and fined $300,000 by the CME Group Inc., which said he made more than $2.8 million in personal profits by front-running trades he placed for the airline.

Jon Ruggles, who led Delta's fuel hedging program, used two accounts in his wife's name more than 80 times between April and December 2012 to place trades that would profit from his employer's market positions, according to a disciplinary notice published by CME on Monday. The firm owns the New York Mercantile Exchange where oil and energy derivatives are traded.

CME also ordered Mr. Ruggles to hand over the $2.8 million the firm alleges he made from these transactions. .

"Ruggles repeatedly abused his trading discretion given to him by his employer for personal gain," the CME notice said.

Mr. Ruggles and his wife, Ivonne, also face a permanent trading ban on CME Group exchanges, according to the CME notice. The disciplinary notice said they declined, through lawyers, to answer exchange regulators' questions about the matter.

Mr. Ruggles didn't return a message seeking comment.

The findings said that while the personal trades were placed with Ivonne Ruggles's identification tag, the electronic addresses associated with the trades led back to the offices of Mr. Ruggles's employer. The notice said the total gains for the couple from the scheme amounted to more than $3.3 million, but that Mr. Ruggles wasn't subject to CME jurisdiction for a portion of the time in question.

The notice didn't specify in which markets Mr. Ruggles placed the trades, or identify his employer by name. Mr. Ruggles left Delta in December 2012.

The U.S. Commodity Futures Trading Commission has launched an investigation into the trades, according to a person familiar with the matter. The CME's disciplinary notice against him said the exchange would waive any disgorgement amount that is similarly required as part of a settlement with the CFTC.

Write to Christian Berthelsen at [e-mail]

(END) Dow Jones Newswires

June 13, 2016 18:36 ET (22:36 GMT)

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