A New York City-based federal court rejected a challenge by the New York Mercantile Exchange that the Commodity Futures Trading Commission could not sue NYMEX for violations by two ex-employees of a statutory prohibition against disclosing nonpublic information “inconsistent with the performance of such person’s official duties as an employee or member” of a registered entity such as NYMEX. (NYMEX is a designated contract market under law.) The CFTC had sued William Byrnes and Christopher Curtin, two former NYMEX employees, in 2013 for improperly disclosing nonpublic trade and customer data they learned through their jobs to a third party, Ron Eibschutz, in return for meals, drinks and entertainment at multiple times. The CFTC also named NYMEX in the suit, claiming it was liable for all violations of Messrs. Byrnes and Curtin as their employer under a legal theory known as “respondeat superior.” NYMEX had argued that it could not be liable for Messrs. Byrnes and Curtin’s actions because the relevant law only permits attribution of employee actions to NYMEX, not liability. In any case, argued NYMEX, it can only be disciplined for potentially violating “core principles” to which it is subject under law as a DCM. The court rejected both arguments. The court also held that the CFTC had alleged sufficient facts to defeat NYMEX’s effort to dismiss the Commission’s lawsuit against the exchange.