STEVEN J. KARVELLAS
, pleaded guilty to violating New York's Martin Act and to Tampering With Physical Evidence, both E felonies.
From 1996 to 2006, Karvellas served as a member of NYMEX's Board of Directors and, from 2000 to 2003, as Chairman of both the Compliance Review Committee and the Adjudication Committee of NYMEX.
KARVELLAS is the owner of two companies, Steven J. Karvellas and Co., a natural gas trading company, and Commercial Brokerage Corp., an introducing broker, both located at One North End Ave, Manhattan.
In pleading guilty, KARVELLAS admitted that from September 2002 to May 2003, while working as a floor broker at NYMEX, he intentionally engaged in fraudulent trading in the natural gas market.
admitted that he
delayed the execution of customer orders to buy or sell natural gas contracts to see in what direction the market was moving.
If the market price moved in a direction that made the customer order immediately profitable, KARVELLAS
would allocate the contracts to himself rather to the customer.
In this manner, he
obligation to faithfully execute his
customers' orders, and stole trading profits that rightly belonged to his
As a result, customer orders would then either be executed at a less favorable price, executed at a later time or not executed at all.
This pattern of misappropriating customer orders enabled him to engage in risk free investing for his
own account and deprived his
customers of the profits they would have realized had he
made the trades properly.
also admitted to tampering with physical evidence.
became aware of the investigation into trading practices on the Exchange's floor and that certain records had been subpoenaed by a New York County Grand Jury, KARVELLAS
ordered a subordinate to destroy a trading ticket which would have exposed his
illegal trading practices.
guilty pleas before Acting Supreme Court Justice Daniel Fitzgerald.
has been promised a sentence of five months in jail to be followed by five years probation.
will also disgorge $850,000 in profits and fines.
STEVEN J. KARVELLAS, 12/14/1959