1 

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

COMMODITY FUTURES TRADING ) 

COMMISSION, ) 

 ) Case No. 4:21-cv-04023 

 Plaintiff, ) 

 ) 

v. ) 

 ) 

PETER MILLER ) 

and OMERTA CAPITAL LLC, ) 

 ) 

 Defendants. ) 

AMENDED COMPLAINT FOR INJUNCTIVE RELIEF, CIVIL MONETARY 

PENALTIES, RESTITUTION, DISGORGEMENT, AND OTHER EQUITABLE RELIEF

 Plaintiff Commodity Futures Trading Commission (“CFTC”), by and through its 

undersigned attorneys, alleges as follows:

I. SUMMARY

1. From at least August 6, 2015, to September 27, 2019, (the “Relevant Period”), 

Peter Miller (“Miller”) and Omerta Capital LLC (“Omerta”) engaged in fraudulent schemes to 

misappropriate material, nonpublic information from two different energy companies, where 

Miller was the last link in a tipping chain that enabled him, through Omerta, to trade on the basis 

of this material, nonpublic information, and to enter into fictitious trades at non-bona fide prices. 

2. One of the fraudulent schemes generally operated in the following manner. From 

at least August 6, 2015 through at least December 28, 2018, an energy trader (“Company Trader

A”) working for an energy company (“Energy Company 1”) disclosed Energy Company 1’s 

block trade order information in natural gas futures contracts listed on the New York Mercantile 

Exchange (“NYMEX”), a Division of CME Group, Inc. (“CME”), including the prices and 

quantities at which Energy Company 1 would trade. Company Trader A disclosed this 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 1 of 44
2 

information to Mathew Webb (“Webb”), the President of, and also a broker with, Classic Energy 

LLC (“Classic”), with the intention that Webb would subsequently disclose it to Miller, trading 

through Omerta, a proprietary trading company he owned. Miller, through Omerta, then entered

into fictitious, non-arm’s length trades with Energy Company 1—on the basis of Energy 

Company 1’s material, nonpublic information as disclosed by Company Trader A to Webb, and 

then Webb to Miller—at advantageous prices that enabled Miller and Omerta to generate a 

profit. Miller then shared these profits with Webb and Company Trader A. 

3. In approximately April 2017, Company Trader A was promoted to an executive 

position within Energy Company 1, and according to company policy was no longer permitted to 

place trades on behalf of Energy Company 1. At this point, Company Trader A then directed 

another trader at Energy Company 1 under his supervision (“Company Trader B”) to disclose 

similar block trade order information to Classic and Webb (and then later an additional broker at 

Classic (“Broker 1”)), which Webb and Broker 1 then disclosed to Miller. Miller then similarly 

traded through Omerta on the basis of this material, nonpublic information, and continued to 

share with the various individuals involved in the fraudulent scheme a portion of the profit from 

these trades. 

4. Shortly after Miller began engaging in the scheme to misappropriate material, 

nonpublic information from Energy Company 1, Miller began engaging in a similar scheme from 

at least September 8, 2015 to September 27, 2019 with another energy trader (“Company Trader 

C”), who disclosed material, nonpublic information belonging to another energy company 

(“Energy Company 2”). In the same manner as with Energy Company 1, Company Trader A, 

and Company Trader B; Company Trader C disclosed the material, nonpublic information of 

Energy Company 2—specifically the prices and quantities at which Energy Company 2 would 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 2 of 44
3 

trade—either to Webb or another Classic broker (“Broker 2”), with the intention that Webb or 

Broker 2 would subsequently disclose it to Miller, trading through Omerta. Miller, through 

Omerta, then entered into fictitious, non-arm’s length trades with Energy Company 2 on the 

basis of this material, nonpublic information at advantageous prices that enabled Miller and 

Omerta to generate a profit. Miller then shared these profits with Webb, Broker 2, and/or 

Company Trader C. 

5. To avoid detection and further perpetuate these fraudulent schemes, when 

interviewed by CME in 2017 about these and related activities, Miller knowingly made false 

statements of material fact to CME related to his trading in the HH Contract and NG Contract. 

Specifically, when questioned by CME about why Miller executed NG Contract trades onscreen 

after receiving a request to provide an offer or bid for a HH Contract block trade, but before the 

execution of that block trade, Miller denied that he had engaged in this pattern of trading. 

6. By engaging in this conduct and further conduct described herein, Miller and 

Omerta have engaged, are engaging, or about to engage in acts and practices that violate Section 

6(c)(1) of the Commodity Exchange Act (“Act”), 7 U.S.C. § 9(1), and Commission Regulation 

(“Regulation”) 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2021). 

7. By this conduct and further conduct described herein, Miller and Omerta have 

engaged, are engaging, or are about to engage in acts and practices that violate Section 4c(a) of 

the Act, 7 U.S.C. § 6c(a). 

8. By this conduct and further conduct described herein, Miller and Omerta have 

engaged, are engaging, or are about to engage in acts and practices that violate Section 9(a)(4) of 

the Act, 7 U.S.C. §13(a)(4). 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 3 of 44
4 

9. Omerta is vicariously liable for Miller’s violations of the Act and Regulations 

because Miller acted as Omerta’s agent when he traded on the basis of material nonpublic 

information that was misappropriated from Energy Company 1 and Energy Company 2, as well

as when he entered into fictitious trades with Energy Company 1 and Energy Company 2 on 

behalf of Omerta. 

10. Miller is liable for Omerta’s violations as a controlling person because as 

Omerta’s President, Chairman, and sole trader he had actual or constructive knowledge of 

Omerta’s trading activities that violated the Act and Regulations, and because he did not act in 

good faith or knowingly induced these same violations through his trading on behalf of Omerta. 

11. Accordingly, the CFTC brings this action under Section 6c of the Act, 7 U.S.C. § 

13a-1, to enjoin Miller’s and Omerta’s unlawful acts and practices and to compel Miller’s and 

Omerta’s compliance with the Act and Regulations. The CFTC also seeks civil monetary 

penalties, disgorgement of the profits Miller and Omerta obtained through the fraudulent scheme, 

restitution, trading and registration prohibitions, and any other such equitable and ancillary relief 

as the Court deems necessary or appropriate under the circumstances.

II. JURISDICTION AND VENUE

12. The Court has jurisdiction of this action pursuant to 28 U.S.C. § 1331 (codifying 

federal question jurisdiction) and 28 U.S.C. § 1345 (providing that district courts have original 

jurisdiction over civil actions commenced by the United States or by any agency expressly 

authorized to sue by Act of Congress). 

13. Section 6c(a) of the Act, 7 U.S.C. § 13a-1 authorizes the CFTC to seek injunctive 

and other relief against any person whenever it shall appear to the CFTC that such person has 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 4 of 44
5 

engaged, is engaging, or is about to engage in any act or practice constituting a violation of any 

provision of the Act, or any rule, regulation, or order thereunder. 

14. Venue lies properly in this Court pursuant to Section 6c(e) of the Act, 7 U.S.C. 

§ 13a-1(c), because Defendants Miller and Omerta transacted business in this District, and 

certain transactions, acts, practices, and courses of business in violation of the Act and the 

Regulations occurred, are occurring, or about to occur in this District, among other places. 

III. THE PARTIES

15. Plaintiff Commodity Futures Trading Commission is an independent federal 

regulatory agency charged by Congress with the administration and enforcement of the Act and 

the Regulations promulgated thereunder. One of its core responsibilities is to protect the public 

interest by ensuring the financial integrity of all transactions subject to the Act and Regulations 

and protecting market participants from fraudulent practices. Section 3(b) of the Act, 7 U.S.C. 

§ 5(b). The CFTC maintains its principal office at Three Lafayette Centre, 1155 21st Street NW, 

Washington, D.C. 20581. 

16. Defendant Peter Miller is an individual who resides primarily in San Juan, 

Puerto Rico. Miller trades natural gas futures contracts through Omerta. Miller is the President, 

Chairman, and an Authorized Member of Omerta. Miller has never been registered with the 

CFTC in any capacity. 

17. Defendant Omerta Capital LLC is a Puerto Rico limited liability company, 

with its principal place of business in Dorado, Puerto Rico. Omerta is a proprietary trading 

company that owns the futures trading accounts that Miller used during the Relevant Period to 

trade natural gas futures contracts and other products. Omerta has never been registered with the 

CFTC in any capacity. 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 5 of 44
6 

IV. OTHER RELEVANT ENTITIES

18. Energy Company 1 is a business that engages in energy marketing and trading in 

North America. Energy Company 1 employs traders who trade natural gas products for the 

benefit of Energy Company 1’s business, including, formerly, Company Trader A and Company 

Trader B. Energy Company 1 frequently used Classic to broker block trades in natural gas 

futures contracts. Energy Company 1 has never been registered with the CFTC.

19. Company Trader A is a resident of Houston, Texas. From the beginning of the 

Relevant Period until July 25, 2019, Company Trader A was employed by Energy Company 1 in 

its office in The Woodlands, Texas. Until April 2017, Company Trader A actively traded on 

behalf of Energy Company 1 while holding a number of supervisory trading positions at Energy 

Company 1. In April 2017, Company Trader A was promoted to an executive position within 

Energy Company 1. Company Trader A has never been registered with the CFTC.

20. Company Trader B is a resident of Spring, Texas. During the Relevant Period, 

Company Trader B traded natural gas futures products on behalf of Energy Company 1. Prior to 

July 25, 2019, Company Trader B was supervised by Company Trader A. Except for a threemonth period that took place before the Relevant Period, Company Trader B has never been

registered with the CFTC.

21. Energy Company 2 is a business that engages in energy pipeline transport, 

including the transportation of natural gas and oil products. Energy Company 2 employs traders 

who trade natural gas products for the benefit of Energy Company 2’s business including, 

formerly, Company Trader C. Energy Company 2 has never been registered with the CFTC. 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 6 of 44
7 

22. Company Trader C is a resident of Houston, Texas. During the Relevant 

Period, Company Trader C traded natural gas futures products on behalf of Energy Company 2. 

Company Trader C has never been registered with the CFTC in any capacity. 

23. Classic Energy LLC was a registered introducing broker located in Houston, 

Texas. Among other services, Classic was a voice broker that brokered block trades for 

customers in energy futures contracts and other products listed on designated contract markets 

such as NYMEX. The CFTC issued two separate orders against Classic asserting violations of 

the Act and Regulations on September 30, 2019, and June 14, 2021. Classic withdrew its 

registration with the CFTC in 2019, and was permanently barred from registering with the CFTC 

on June 14, 2021.

24. Mathew D. Webb was the founder, President, sole member, and a registered 

Associated Person of Classic. Webb brokered block trades for Classic customers in natural gas 

futures contracts listed on NYMEX. The CFTC issued orders against Webb asserting violations 

of the Act and Regulations on September 30, 2019, and June 14, 2021. Webb’s registration with 

the CFTC was temporarily suspended in 2019, and then on June 14, 2021, Webb was 

permanently barred from registering with the CFTC. 

V. FACTS

A. The Fundamentals of the Natural Gas Futures Market Used in the Fraudulent 

Scheme. 

25. Natural gas is an energy commodity traded by buyers and sellers. 

26. One way to trade natural gas it to buy or sell a futures contract. A futures contract 

is an agreement to buy or sell a commodity at a fixed quantity and price for delivery or cash

settlement at a specific date and time in the future. Futures contracts are used to assume or shift 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 7 of 44
8 

price risk and may be satisfied by cash settlement, delivery, or offset. Futures contracts are 

commonly used to hedge risks or to speculate on the price of physical commodities. 

27. Futures contracts are traded on exchanges—designated contract markets regulated 

by the CFTC—including NYMEX, a subsidiary of CME. NYMEX lists different products for 

trading, including natural gas futures contracts, and both determines and enforces rules and 

procedures for trading on its exchange.

28. A trader can place an order to either buy (a “bid”) or to sell (an “offer”) a certain 

quantity of a specific futures contract. An order is “filled” when a buyer’s bid price and a 

seller’s offer price match for a particular futures contract. A trader who purchases a futures 

contract establishes a “long” position, and a trader who sells a futures contract establishes a 

“short” position. 

29. Offsetting trades are opposite transactions for an equal number of contracts of the 

same delivery month that liquidate a purchase or sale of a futures contract and close the long or 

short position (i.e., 100 “long” futures contracts are offset by 100 of the same “short” futures 

contracts). The net gain or loss on the trade is equal to the difference between the price of the 

futures contracts when the position was opened and the price of the futures contracts when the 

position was closed, or offset. 

30. A spread is the price differential between two futures contracts. A spread may 

involve two contracts for the same commodity but different delivery months, or two contracts for 

different commodities. A market participant that trades a spread opens a long position in one 

contract and a short position in another contract. The market participant hopes to profit from the 

change in the price differential between the two contracts.

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 8 of 44
9 

31. Natural gas trades at different prices at different physical delivery points 

throughout the United States. “Henry Hub”—the delivery location near Louisiana’s Gulf Coast 

that connects several intrastate and interstate pipelines—is used as the standard pricing reference 

for many natural gas futures contracts. NYMEX lists multiple futures contracts that are priced 

based on the price of natural gas at the Henry Hub delivery point during specified time periods, 

known as delivery months. 

32. One such contract is the Henry Hub Natural Gas Futures contract (“NG 

Contract”). Another such contract is the Natural Gas (Henry Hub) Last-Day Financial Futures 

contract (“HH Contract”). The NG Contract and the HH Contract are both based on the price of 

natural gas at the Henry Hub delivery point and identical in nearly all contract specifications. 

The difference between the NG Contract and the HH Contract is that the NG Contract is 

physically-settled; meaning that at the expiration of the contract, a person with an open position 

must take or make delivery of natural gas at the Henry Hub; whereas the HH Contract is 

financially-settled, meaning that at the expiration of the contract, a person with an open position 

receives or pays the difference between the price at which they opened the position and the final 

settlement price. The prices of the NG Contract and the HH Contract are often very close to one 

another, but are often not identical. CME considers the NG Contract and the HH Contract to be 

“closely-related” products, meaning that the two contracts are highly correlated, can serve as 

substitutes for each other, or are functional economic equivalents. 

33. Traders can buy or sell the NG Contract or the HH Contract either for a single 

delivery month or for a “calendar strip” of multiple consecutive delivery months. 

34. With limited exceptions, futures contracts are required to be traded openly and 

competitively. All futures contracts listed and traded on NYMEX, including natural gas futures 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 9 of 44
10 

contracts, are traded through Globex, the electronic trading platform operated by CME to 

facilitate electronic trading on CME exchanges. Trading through the Globex platform is 

colloquially referred to by market participants as trading “onscreen.” 

35. One exception is block trades, which are permissible, privately-negotiated 

transactions that meet certain minimum contract number thresholds set by the exchanges. As 

reflected by the minimum contract size requirements, block trades are significantly larger in 

number of contracts and are often used by institutional investors. While block trades are not 

negotiated on the open market, under exchange rules they are required to be executed at fair and 

reasonable prices, taking into account, among other factors, the circumstances and prices of the 

market. All block trades are also required to be reported to NYMEX. Once reported, NYMEX 

posts publicly the price and quantity at which the block trade was executed, among other data. 

B. Miller Engaged in a Scheme To Defraud Energy Company 1 by Trading on the 

Basis of Material Nonpublic Information Misappropriated from Energy Company 

1. 

1. Company Trader A Often Traded Natural Gas Futures Contracts Via Block 

Trades. 

36. Company Trader A was a natural gas trader who held a number of supervisory 

trading positions at Energy Company 1. In April 2017, Company Trader A was promoted to an 

executive position within Energy Company 1 and stopped actively trading. Company Trader A 

served in that capacity until his employment was terminated on July 25, 2019. 

37. Before being promoted, Company Trader A traded natural gas futures contracts 

on behalf of Energy Company 1 on NYMEX. Company Trader A traded these natural gas 

futures contracts either onscreen through Globex, CME’s electronic trading platform, or as block 

trades.

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 10 of 44
11 

38. When trading natural gas futures contracts as block trades on behalf of Energy 

Company 1, Company Trader A often used voice brokers to locate counterparties and facilitate 

execution of the block trades. 

39. Classic was a voice brokerage firm that facilitated block trades between its 

customers in, among other things, natural gas futures contracts. Classic’s brokers facilitated 

block trades by soliciting and receiving block trade orders from Classic’s customers. Classic 

brokers would then locate potential counterparties for the block trades either from among 

Classic’s other customers, or from the customers of another voice broker. Once Classic’s 

brokers located a counterparty, and provided the counterparty’s bid or offer for the block trade, 

the block trade was executed when the customer expressed its acceptance of the bid or offer. 

Brokers then submitted the details of the executed block trade to the exchange clearinghouse for 

clearing. Brokers earn revenue on these trades by charging their customers a commission for 

facilitating, executing, and clearing the block trades. 

2. Miller and Other Scheme Participants Developed and Executed a Plan To 

Defraud Energy Company 1. 

40. In August 2015, while attending the wedding of Company Trader B, Miller had a 

discussion with Company Trader A and Webb. In this discussion, Company Trader A proposed 

the fraudulent scheme to Webb and Miller. As part of this scheme, Company Trader A would 

send to Webb material non-public information regarding the block trade orders in the HH 

Contract that Energy Company 1 intended to execute, in a manner that appeared similar to how 

Company Trader A typically communicated with voice brokers. Webb, in turn, understood he 

was to share this block trade order information with Miller only. 

41. As a trader, Miller knew and understood that traders such as Company Trader A 

typically consider their block trade order information to be highly confidential. Miller further 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 11 of 44
12 

knew that the information he received from Webb was nonpublic information belonging to 

Energy Company 1 that Webb disclosed to him for the purpose of arranging a fictitious block 

trade in furtherance of the scheme. 

42. Miller knowingly or recklessly traded on the basis of this material nonpublic 

information by typically trading the HH Contract and NG Contract through Omerta as a spread; 

simultaneous or near-simultaneous trades for the same volume, but in opposite directions. Miller 

executed trades in the NG Contract (typically onscreen) and, at or near the same time, executed a 

fictitious, non-arm’s length block trade with Energy Company 1 in the HH Contract at a price of 

his choosing. By trading on the basis of Energy Company 1’s information, Miller was able to 

time his execution of trades in the NG Contract and select a price for the block trade in the HH 

Contract that enabled Omerta to generate trading profits on Miller’s NG Contract/HH Contract 

spread trades. As part of the scheme, Miller shared these trading profits with both Company 

Trader A and Webb. 

3. Company Trader A Had a Duty To Keep Confidential Energy Company 1’s 

Block Trade Order Information. 

43. Participants in the block trade market consider their block trade orders and any 

other confidential information they provide to voice brokers regarding their trading intentions to 

be material, nonpublic information. Through his employment with Energy Company 1, 

Company Trader A developed and had access to Energy Company 1’s information regarding 

what block trade orders it would place and the prices and quantities at which Energy Company 1 

was willing to execute a block trade. Company Trader A considered this information to be 

material, nonpublic information. 

44. As an employee of Energy Company 1, Company Trader A had a duty to keep 

this block trade order information confidential and disclose it to the voice brokers used by 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 12 of 44
13 

Energy Company 1 for the purpose of locating potential block trade counterparties and executing 

block trades for the benefit of Energy Company 1. 

45. Under the employment agreements, policies, and procedures that governed 

Company Trader A’s employment with Energy Company 1, Company Trader A agreed and had 

a duty to keep confidential, nonpublic information belonging to Energy Company 1 and not to 

disclose it to unauthorized persons or use it for any purpose other than performing his duties as 

an employee of Energy Company 1. Under these agreements, policies, and procedures, all 

information of a confidential, proprietary, or secret nature that is related in any way to the 

business of Energy Company 1 was considered confidential, nonpublic information.

4. Company Trader A Breached His Duty to Energy Company 1 By Disclosing 

Its Block Trade Order Information to Webb, Who in Turn Disclosed This 

Information to Miller. 

46. Company Trader A typically traded the HH Contract either for a single delivery 

month, as a calendar strip of multiple delivery months, or as a calendar spread between two 

delivery months. Miller, Webb, and Company Trader A agreed that Company Trader A would 

signal to Webb that he wanted to trade in furtherance of the fraudulent scheme by giving Webb a 

block trade request for a single delivery month, as opposed to a calendar strip or calendar spread. 

When Company Trader A disclosed to Webb a block trade order for the HH Contract for a single 

delivery month, Webb would disclose this block trade order information to Miller only, instead 

of soliciting bids and/or offers from among multiple Classic customers, as was his typical 

practice. 

47. Company Trader A knew and understood that when he disclosed a single-month 

HH Contract order to Webb that Webb would provide this information to Miller only. Company 

Trader A further knew and understood that Miller would trade on the basis of this information in 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 13 of 44
14 

the manner described below. Company Trader A disclosed this information knowing and 

understanding that he would share in the profits Omerta generated from trading on the basis of 

this information. 

48. Similarly, Webb knew and understood that when Company Trader A disclosed a 

single-month HH Contract order to him, Company Trader A intended for Webb to share the 

order with Miller only. As a voice broker, Webb knew and understood that traders consider their 

block trade order information to be highly confidential. Webb further knew and understood that 

traders disclose this block trade order information to voice brokers for the limited purpose of 

locating potential counterparties to a block trade and do expect voice brokers will not disclose 

the identity of the trader or firm placing the order. Webb further knew and understood that when 

Company Trader A shared Energy Company 1’s order information with him, Company Trader A 

was not using Classic to locate counterparties and execute block trades in the ordinary course of 

his business for Energy Company 1, but rather in furtherance of the scheme. 

49. Webb disclosed this information to Miller knowing and understanding that Webb 

would also share in the profits Omerta generated from trading on the basis of this information. 

Webb disclosed this information to Miller also knowing and understanding that he and Classic 

would benefit from the increased brokerage activity and commission revenue generated by 

Energy Company 1’s and Miller’s trading in furtherance of the scheme.

50. In March of 2017, Company Trader A received a promotion within Energy 

Company 1 and no longer actively traded on its behalf. To continue the scheme, Company 

Trader A directed Company Trader B, who had worked as a trader underneath Company Trader 

A, to disclose Energy Company 1’s block trade order information to Webb and Broker 1, another 

Classic broker, in the same manner as Company Trader A had been doing. Accordingly, 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 14 of 44
15 

Company Trader A directed Company Trader B to disclose this information with the 

understanding that Webb and Broker 1 would further disclose this information to Miller so that 

Miller could trade on the basis of this information. Company Trader A knew and understood 

that he would continue to receive from Miller a share of the profits Omerta generated by trading 

on the basis of this information disclosed by Company Trader B. 

51. Similarly, Webb and Broker 1 knew and understood that they were to disclose the 

block trade order information they received from Company Trader B to Miller so that Miller 

could continue to trade in furtherance of the scheme. Webb and Broker 1 disclosed this 

information knowing and understanding that they and Classic would benefit from the increased 

brokerage activity and commission revenue generated by Company Trader B’s and Miller’s 

trading in furtherance of the scheme. 

5. Miller Traded the NG Contract and HH Contract and Generated Trading 

Profits for Omerta on the Basis of Energy Company 1’s Misappropriated 

Information. 

 

52. Miller typically traded in furtherance of the scheme by trading the HH Contract 

and NG Contract as a spread; simultaneous or near-simultaneous trades for the same volume, but 

in opposite directions. Miller traded the HH Contract/NG Contract as a spread by buying (or 

selling) the HH Contract, typically as a block trade, while at approximately the same time selling 

(or buying) the NG Contract, typically onscreen, all in equal volumes. Miller later offset this 

position, and thereby realized a profit or a loss, by selling (or buying) the HH Contract and 

buying (or selling) the NG Contract. 

53. By trading in this manner, Omerta generated profits based on the relative 

movement of the prices of the HH Contract and the NG Contract. For example, if Miller opened 

a position by buying the HH Contract and selling the NG Contract, at a time when the NG 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 15 of 44
16 

Contract was trading at a higher price than the HH Contract, Omerta would profit if the price of 

the NG Contract decreased relative to the HH Contract at the time Miller offset the position. 

Similarly, if Miller opened a position by selling the HH Contract and buying the NG Contract, 

again at a time when the NG Contract was trading at a higher price than the HH Contract, 

Omerta would profit if the price of the NG Contract increased relative to the HH Contract at the 

time Miller offset the position. 

54. By trading on the basis of Energy Company 1’s confidential block trade order 

information provided by Company Trader A (or Company Trader B at the direction of Company 

Trader A), Miller was able to obtain the price for the HH Contract he needed to make this HH 

Contract/NG Contract spread trade profitable, regardless of whether that price was available in 

the market for the HH Contract. In addition to obtaining his desired price on the HH Contract 

based on Energy Company 1’s confidential block trade order information, Miller was also able to 

make his NG Contract trades—which are highly correlated to HH Contract prices—more 

profitable (or less unprofitable) than they would have otherwise been had Miller not 

misappropriated Energy Company 1’s confidential block trade order information in the HH 

Contract. 

55. Miller engaged in three principal trading patterns, all involving trading on the 

basis of information provided by Company Trader A (or Company Trader B at the direction of 

Company Trader A), when trading the HH Contract/NG Contract as a spread. 

56. In the first pattern, Miller opened spread trade positions in the HH Contract and 

NG Contract with other market participants and closed the HH Contract leg of this position 

against Energy Company 1. In this pattern, at a time when Miller had an open HH Contract/NG 

Contract spread position, Company Trader A or B contacted Webb or Broker 1 via instant 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 16 of 44
17 

message and described the delivery month and quantity of the HH Contract Energy Company 1 

was willing to trade, understanding that Webb or Broker 1 would disclose this information only 

to Miller and not solicit prices from among Classic’s brokerage customers. Webb or Broker 1 

then contacted Miller, who gave a price for the HH Contract that would close his open HH 

Contract leg at a favorable price. Company Traders A and B typically accepted whatever price 

Webb or Broker 1 communicated on behalf of Miller. 

57. After Miller received Energy Company 1’s block trade order information for the 

HH Contract from Webb or Broker 1, Miller executed trades onscreen in the NG Contract that 

closed his open NG Contract leg. Miller typically executed these trades for the NG Contract 

after receiving the order information from Webb or Broker 1, and before or immediately after 

Webb or Broker 1 confirmed the execution of the block trade. Miller’s trading of the HH 

Contract and NG Contract closed his open spread position. In most of the instances when Miller 

engaged in this trading pattern, he generated a trading profit for Omerta. 

58. Miller’s and Company Trader A’s trading on February 23, 2017 illustrates this 

first pattern. On this day, Miller had an existing open position spread position in the May 2017 

NG Contract and May 2017 HH Contract. Specifically, Miller was long (bought) 100 lots in the 

HH Contract and short (sold) 100 lots in the NG Contract. On February 23, 2017, Miller closed 

this open position as follows: 

a. At 9:59:12 AM, Company Trader A contacted Webb via IM and told 

Webb he needed to buy 100 lots of the May 2017 HH Contract. 

b. At 9:59:33 AM, Webb asked Miller to provide an offer for 100 lots of the 

May 2017 HH Contract. 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 17 of 44
18 

c. At 10:03:01 AM, Miller provided Webb with a price of 2.853 for the 

block trade. 

d. At 10:03:07 AM, Miller purchased 100 lots of the May 2017 NG Contract 

onscreen, closing his open 100-lot short position in the May 2017 NG 

Contract.

e. At 10:03:25 AM, Webb confirmed to Company Trader A that Miller sold 

100 lots of the May 2017 HH Contract via a block trade with Company A, 

closing his open 100-lot long position in the May 2017 HH Contract. 

Webb reported this trade as having been executed at 10:04:44 AM. 

f. Omerta earned trading profits on these offsetting trades amounting to 

$3,370. 

59. In the second pattern, Miller opened positions in the HH Contract with block 

trades opposite Energy Company 1—at advantageous prices for Omerta—after Webb or Broker 

1 disclosed to Miller the block trade order information they received from Company Traders A 

or B in the manner described above. Miller then closed these positions against other market 

participants, or, in some cases, other participants in the fraudulent scheme. By trading in this 

manner, Miller was able to open positions at better prices than were otherwise available in the 

market, and was later able to offset these positions at a profit. 

60. Company Trader A’s and Miller’s trading on January 27, 2017 illustrates this 

second pattern. Miller opened a position for 100 lots in the February 2017 NG Contract/HH

Contract spread, buying the NG Contracts onscreen and selling the HH Contracts via a block 

trade to Company Trader A. Almost immediately after opening this position, Miller sold 100 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 18 of 44
19 

lots of the February 2017 NG Contract and bought 100 lots of the February 2017 HH Contract, 

all onscreen, offsetting this open position: 

a. At 8:13:35 AM, Company Trader A contacted Webb via IM and told 

Webb he needed to buy 100 lots of the February 2017 HH Contract.

b. At 8:14:36 AM, Webb asked Miller to provide an offer for 100 lots of the 

February 2017 HH Contract. 

c. At 8:14:48 AM, Miller provided Webb with a price of 3.282 for the block 

trade.

d. At 8:15:39 AM, Webb confirmed to Company Trader A that Miller sold 

100 lots of the February 2017 HH Contract via a block trade with Energy 

Company 1, opening a 100-lot short position in the February 2017 HH 

Contract. Webb reported this trade as having been executed at 8:15:53 

AM. 

e. Between 8:15:21 AM and 8:15:51 AM, Miller purchased 100 lots of the 

February 2017 NG Contract onscreen, opening a 100-lot long position in 

the February 2017 NG Contract. 

f. Between 8:16:33 AM and 8:23:37 AM, Miller sold 100 lots of the 

February 2017 NG Contract onscreen and bought 100 lots of the February 

2017 HH Contract onscreen. These onscreen trades offset the open 100-

lot NG Contract/HH Contract spread position Miller had just opened on 

the basis of the block trade order information disclosed by Company 

Trader A to Webb. 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 19 of 44
20 

g. Omerta earned trading profits on these offsetting trades amounting to 

$3,320. 

61. In the third pattern, Miller both opened and closed positions in the HH Contract 

with block trades opposite Energy Company 1—at advantageous prices for Omerta—after Webb 

or Broker 1 disclosed to Miller the block trade order information they received from Company 

Traders A or B in the manner described above. 

62. Company Trader A’s and Miller’s trading on March 2, 2017 illustrates this third 

pattern. On this day, Miller opened a spread position of 125 lots in the May 2017 NG Contract 

and May 2017 HH Contract, buying the May 2017 NG Contract onscreen and selling the May 

2017 HH Contract via a block trade with Company Trader A. A little over an hour later, Miller

sold the May 2017 NG Contract onscreen and bought the May 2017 HH Contract via a block 

trade with Company Trader A, offsetting his open spread position. 

a. At 8:35:13 AM, Company Trader A contacted Webb via IM and told 

Webb he needed to buy 125 lots of the May 2017 HH Contract. 

b. At 8:37:05 AM, Webb asked Miller to provide an offer for 125 lots of the 

May 2017 HH Contract. 

c. At 8:37:18 AM, Miller provided Webb with a price of 2.891 for the block 

trade. 

d. Between 8:37:44 AM and 8:38:18 AM, Miller purchased 125 lots of the 

May 2017 NG Contract onscreen, opening a 125-lot long position in the 

May 2017 NG Contract. 

e. At 8:38:08 AM, Webb confirmed to Company Trader A that Miller sold 

125 lots of the May 2017 HH Contract via a block trade with Energy 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 20 of 44
21 

Company 1, opening a 125-lot short position in the February 2017 HH 

Contract. Webb reported this block trade as having been executed at 

8:38:13. 

f. A little over one hour later, at 9:42:03 AM, Company Trader A contacted 

Webb via IM and told Webb he now needed to sell 125 lots of the May 

2017 HH Contract. 

g. At 9:42:57 AM, Webb asked Miller to provide a bid for 125 lots of the 

May 2017 HH Contract. 

h. At 9:44:30 AM, Miller provided Webb with a price of 2.87 for the block 

trade. 

i. At 9:45:04 AM, Miller sold 125 lots of the May 2017 NG Contract

onscreen, closing the 125-lot long position in the May 2017 NG Contract 

he had opened approximately an hour earlier. 

j. At 9:45:13 AM, Webb confirmed to Company Trader A that Miller

purchased 125 lots of the May 2017 HH Contract via a block trade with 

Energy Company 1, closing Miller’s 125-lot short position in the May 

2017 HH Contract. Webb reported this block trade as having been 

executed at 9:45:25 AM. 

k. Omerta earned trading profits on these offsetting trades amounting to 

$8,040. 

63. During the Relevant Period, Miller engaged in a total of 100 events where he 

opened and closed positions in the HH Contract/NG Contract spread on the basis of block trade 

order information disclosed by Company Trader A or B. These events involved a total of 103 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 21 of 44
22 

block trades executed by Company Trader A and 45 block trades executed by Company Trader 

B at the direction of Company Trader A. Of these 100 events, 85 were profitable for Miller, 

resulting in a win rate of 85 percent. In total, Miller generated net trading profits of $1,516,207 

on the 100 events when he traded on the basis of Energy Company 1’s material, nonpublic 

information. 

64. Miller shared the profits generated in Omerta’s trading account with Company 

Trader A and Webb in the form of cash. Miller typically delivered these cash payments to either 

Company Trader A or Webb in person in or around Houston, Texas. 

C. Miller Also Engaged in a Scheme To Defraud Energy Company 2 by Trading on the 

Basis of Material Nonpublic Information Misappropriated by Energy Company 2. 

65. Beginning around September 8, 2015 and continuing until at least September 27, 

2019, Miller engaged in a similar scheme by trading in a similar manner with Company Trader 

C, facilitated by Webb and Broker 2. Company Trader C traded natural gas futures contracts on 

behalf of Energy Company 2. Company Trader C traded these natural gas futures contracts 

either “onscreen” through Globex, CME’s electronic trading platform, or as block trades. Like 

Company Traders A and B, through his employment Company Trader C had access to Energy 

Company 2’s information regarding what block trade orders it would place and the prices and 

quantities at which Energy Company 2 was willing to execute a block trade. Company Trader C 

considered this information to be material, nonpublic information. 

66. Like Company Trader A and Company Trader B, Company Trader C often used 

voice brokers to locate counterparties and facilitate execution of the block trades in natural gas 

futures, including Broker 2 at Classic. As an employee of Energy Company 2, Company Trader 

C had a duty to keep this block trade order information confidential and to disclose it to the voice 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 22 of 44
23 

brokers used by Energy Company 2 for the purpose of locating potential block trade 

counterparties and executing block trades for the benefit of Energy Company 2. 

67. Under the employment agreements, policies, and procedures that governed 

Company Trader C’s employment with Energy Company 2, Company Trader C agreed and had a 

duty to keep confidential nonpublic information belonging to Energy Company 2 and not to 

disclose it to unauthorized persons or use it for any purpose other than performing his duties as 

an employee of Energy Company 2. Under these agreements, policies, and procedures, all 

information of a confidential, proprietary, or secret nature that is related in any way to the 

business of Energy Company 2 was considered confidential, nonpublic information. 

68. Company Trader C, Miller, Webb, and Broker 2 agreed that Company Trader C 

would signal to Webb or Broker 2 that he wanted to trade in furtherance of the fraudulent 

scheme by giving Webb or Broker 2 a block trade request for a single delivery month, as 

opposed to a calendar strip or calendar spread. When Company Trader C disclosed to Webb or 

Broker 2 a block trade order for the HH Contract for a single delivery month, Webb or Broker 2 

would disclose this block trade order information to Miller only, instead of soliciting bids and 

offers from among multiple Classic customers. 

69. Company Trader C knew and understood that when he disclosed a single-month 

HH Contract order to Webb or Broker 2 that Webb or Broker 2 would provide this information 

to Miller only. Company Trader C further knew and understood that Miller would trade on the 

basis of this information in a manner similar to that described in Section V.B.4. above regarding 

the information disclosed by Company Traders A and B. Company Trader C disclosed this 

information knowing and understanding that he would share in the profits Omerta generated 

from trading on the basis of this information. 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 23 of 44
24 

70. Webb and Broker 2 also knew and understood that when Company Trader C 

disclosed a single-month HH Contract order to them, Company Trader C intended for Webb or 

Broker 2 to share the order with Miller only. As voice brokers, Webb and Broker 2 knew and 

understood that traders consider their block trade order information to be highly confidential. 

Webb and Broker 2 further knew and understood that traders disclose this block trade order 

information to voice brokers for the limited purpose of locating potential counterparties to a 

block trade and that traders do expect voice brokers will not disclose the identity of the trader or 

firm placing the order. Webb and Broker 2 further knew and understood that when Company 

Trader C shared Energy Company 2’s order information with them, Company Trader C was not 

using Classic to locate counterparties and execute block trades in the ordinary course of his 

business for Energy Company 2, but rather in furtherance of the scheme. 

71. Similarly, Webb and Broker 2 knew and understood that they were to disclose the 

block trade order information they received from Company Trader C to Miller so that Miller 

could continue to trade in furtherance of the scheme. Webb and Broker 2 disclosed this 

information knowing and understanding that they and Classic would benefit from the increased 

brokerage activity and commission revenue generated by Company Trader C’s and Miller’s 

trading in furtherance of the scheme. In addition, Webb and Broker 2 expected to share in the 

profits Miller generated from his trading in furtherance of the scheme. 

72. Miller knew and understood that traders such as Company Trader C consider their 

block trade order information to be highly confidential. Miller further knew that the information 

he received from Webb and Broker 2 was nonpublic information belonging to Energy Company 

2 that Webb or Broker 2 had a duty to keep confidential, but instead disclosed to Miller for the 

purpose of arranging a fictitious block trade in furtherance of the scheme. 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 24 of 44
25 

73. Similar to his trading involving Company Traders A and B from Energy 

Company 1, Miller knowingly or recklessly traded on the basis of this material nonpublic 

information when trading with Company Trader C on behalf of Energy Company 2 by typically 

trading the HH Contract and NG Contract as a spread. 

74. By trading on the basis of Energy Company 2’s confidential block trade order 

information provided by Company Trader C, Miller was able to obtain the price for the HH 

Contract he needed to make this HH Contract/NG Contract spread trade profitable, regardless of 

whether that price was available in the market for the HH Contract. In addition to obtaining his 

desired price on the HH Contract based on Energy Company 2’s confidential block trade order 

information, Miller was also able to make his NG Contract trades—which are highly correlated 

to HH Contract prices—more profitable (or less unprofitable) than they would have otherwise 

been had Miller not misappropriated Energy Company 2’s confidential block trade order 

information in the HH Contract. By trading in this manner Omerta generated profits based on 

the relative movement of the prices of the HH Contract and the NG Contract.

75. With respect to Energy Trader C, Miller engaged in three principal trading 

patterns—all involving trading on the basis of information belonging to Energy Company 2 as 

provided by Company Trader C—when trading the HH Contract/NG Contract as a spread. 

76. In the first pattern, Miller closed spread trade positions in the HH Contract and 

NG Contract that were opened on a previous day. Miller opened the spread trade positions on a 

previous day via block trades, typically with either Company Trader C on behalf of Energy 

Company 2 (in the majority of instances) or with Company Trader A or Company Trader B on 

behalf of Energy Company 1. In this pattern, at a time when Miller had an open HH 

Contract/NG Contract spread position, Company Trader C contacted Webb or Broker 2 via 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 25 of 44
26 

instant message and described the delivery month and quantity of the HH Contract Energy 

Company 2 was willing to trade, understanding that Webb or Broker 2 would disclose this 

information only to Miller and not solicit prices from among Classic’s brokerage customers. 

Webb or Broker 2 then contacted Miller, who gave a price for the HH Contract that would close 

his open HH Contract leg at a favorable price. Company Trader C typically accepted whatever 

price Webb or Broker 2 communicated on behalf of Miller. 

77. After Miller received Energy Company 2’s block trade order information for the 

HH Contract from Webb or Broker 2, Miller executed trades onscreen in the NG Contract that 

closed his open NG Contract leg. Miller typically executed these trades for the NG Contract 

after receiving the order information from Webb or Broker 2, and before or immediately after 

Webb or Broker 2 confirmed the execution of the block trade. Miller’s trading of the HH 

Contract and NG Contract closed his open spread position. In most of the instances when Miller 

engaged in this trading pattern, he generated a trading profit for Omerta. 

78. Miller’s and Company Trader C’s trading on June 12, 2019 illustrates this first 

pattern. On this day, Miller had an existing open position spread position in the July 2019 NG 

Contract and July 2019 HH Contract. Specifically, Miller was short (sold) fifty lots in the HH 

Contract and long (bought) fifty lots in the NG Contract. On June 12, 2019, Miller closed this 

open position as follows: 

a. At 11:34:11 AM, Company Trader C contacted Broker 2 via IM and 

indicated his interest in selling fifty lots of the July 2019 HH Contract. 

Starting at 11:34:26 AM, Company Trader C, Broker 2 and Miller 

engaged in various conversations via IM, and, as a result, at 11:35:48 AM 

Broker 2 confirmed that Miller bought fifty lots of the July 2019 HH 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 26 of 44
27 

Contract at a price of 2.384, closing Miller’s open fifty-lot short position 

in the July 2019 HH Contract. 

b. From 11:35:48 AM to 11:35:53 AM, Miller sold fifty lots of the July 2019 

NG Contract onscreen, closing his open fifty-lot long position in the July 

2019 NG Contract. 

c. At 11:36:04 AM, Broker 2 confirmed to Company Trader C that Energy 

Company 2 sold fifty lots of the July 2019 HH Contract at a price of 

2.384. Broker 2 reported the block trade as having been executed at 

11:36:04 AM. 

d. Omerta earned trading profits on these offsetting trades amounting to 

$2,230. 

79. In the second pattern, Miller opened positions in the HH Contract with block 

trades opposite Energy Company 2—at advantageous prices for Omerta—after Webb or Broker 

2 disclosed to Miller the block trade order information they received from Company Trader C in 

the manner described above. On the same day, Miller then closed these positions against other 

market participants, or, in some cases, other scheme participants. By trading in this manner, 

Miller was able to open positions at better prices than were otherwise available in the market, 

and was later able to offset these positions at a profit. 

80. Company Trader C’s and Miller’s trading on March 28, 2017 illustrates this 

second pattern. Miller opened a position for fifty lots in the April 2017 NG Contract/HH 

Contract spread, selling the NG Contracts onscreen and buying the HH Contracts via a block 

trade to Company Trader C. Almost immediately after opening this position, Miller bought fifty

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 27 of 44
28 

lots of the April 2017 NG Contract and sold fifty lots of the April 2017 HH Contract, all 

onscreen, offsetting this open position. 

a. At 8:53:53 AM, Company Trader C contacted Broker 2 via IM and

indicated his interest in selling fifty lots of the April 2017 HH Contract. 

Starting at 8:54:28 AM, Company Trader C, Broker 2, and Miller engaged 

in various IM conversations, and, as a result, Broker 2 confirmed at 

8:55:26 AM that Miller bought fifty lots of the April 2017 HH Contract at 

a price of 3.06, opening a fifty-lot long position in the April 2017 HH 

Contract. 

b. From 8:55:28 AM to 8:55:33 AM, Miller sold fifty lots of the April 2017 

NG Contract onscreen, opening a fifty-lot short position in the April 2017 

NG Contract. 

c. At 8:55:51 AM, Broker 2 confirmed to Company Trader C that Energy 

Company 2 sold fifty lots of the April 2017 HH Contract for 3.06. Broker 

2 reported the block trade as having been executed at 8:55:34 AM. 

d. At 8:56:23 AM, Miller simultaneously bought fifty lots of the April 2017 

NG Contract and sold fifty lots of the April 2017 HH Contract onscreen, 

closing out the open April 2017 HH Contract/NG Contract spread 

position. 

e. Omerta earned trading profits on these offsetting trades amounting to 

$5,050. 

81. In the third pattern, Miller both opened and closed positions on the same day in 

the HH Contract with block trades opposite Energy Company 2—at advantageous prices for 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 28 of 44
29 

Omerta—after Webb or Broker 2 disclosed to Miller the block trade order information they 

received from Company Trader C in the manner described above. 

82. Company Trader C’s and Miller’s trading on May 17, 2018 illustrates this third 

pattern. On this day, Miller opened a total spread position of 100 lots in the October 2018 NG 

Contract and October 2018 HH Contract by selling the October 2018 NG Contract onscreen and 

buying the October 2018 HH Contract via multiple block trades with Company Trader C. A few 

hours later, Miller offset the 100-lot spread position by buying 100 lots of the October 2018 NG 

Contract onscreen and selling 100 lots of the October 2018 HH Contract via a single block trade 

with Company Trader C. 

a. At 10:02:55AM, Company Trader C contacted Broker 2 via IM and 

indicated his interest in selling fifty lots of the October 2018 HH Contract. 

Starting at 10:03:13 AM, Company Trader C, Broker 2, and Miller 

engaged in various IM conversations and, as a result, Broker 2 confirmed

at 10:03:36 AM that Miller bought fifty lots of the October 2018 HH 

Contract at a price of 2.848. 

b. Subsequently, from 10:03:40 AM to 10:03:51 AM, Miller sold fifty lots of 

the October 2018 NG Contract onscreen. 

c. At 10:03:56 AM, Broker 2 confirmed to Company Trader C that Energy 

Company 2 sold fifty lots of the October 2018 HH Contract at a price of 

2.848. Broker 2 reported the block trade as having been executed at 

10:03:56 AM. 

d. Approximately eighteen minutes later, at 10:21:06 AM, Company Trader 

C asked Broker 2 if he could sell an additional fifty lots of the October 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 29 of 44
30 

2018 HH Contract. From 10:21:37 AM to 10:22:20 AM, Company Trader 

C, Broker 2, and Miller engaged in various IM conversations, and, as a 

result, Broker 2 confirmed at 10:22:20 AM that Miller bought an 

additional fifty lots of the October 2018 HH Contract at a price of 2.855, 

bringing Miller’s open long position in the October 2018 HH Contract to 

100 lots. 

e. From 10:22:21 AM to 10:22:31 AM, Miller sold fifty lots of the October 

2018 NG Contract onscreen, bringing Miller’s open short position in the 

October 2018 NG Contract to 100 lots. 

f. At 10:22:37 AM, Broker 2 confirmed to Company Trader C that Energy 

Company 2 sold an additional fifty lots of the October 2018 HH Contract 

at a price of 2.855. Broker 2 reported the block trade as having been 

executed at 10:22:37 AM. 

g. Approximately three hours later, at 1:31:37 PM, Company Trader C 

contacted Broker 2 via IM and indicated his interest in buying 100 lots of 

the October 2018 HH Contract. Starting at 1:31:54 PM, Company Trader 

C, Broker 2, and Miller engaged in a series of instant messages, and, as a 

result, Broker 2 confirmed at 1:34:43 PM that Miller sold 100 lots of the 

October 2018 HH Contract at a price of 2.881, closing out Miller’s 100-lot 

long position in the October 2018 HH Contract. 

h. From 1:33:03 PM to 1:33:20 PM, Miller bought 100 lots of the October 

2018 NG Contract onscreen, closing out his open 100-lot short position in 

the October 2018 NG Contract. At 1:33:20 PM, Broker 2 confirmed to 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 30 of 44
31 

Company Trader C that Energy Company 2 bought 100 lots of the October 

2018 HH Contract at a price of 2.881. Broker 2 reported the block trade 

as having been executed at 1:33:20 PM. 

i. Omerta earned trading profits on these offsetting trades amounting to 

$4,790. 

83. During the Relevant Period, Miller engaged in a total of 577 events where he 

opened and closed positions in the HH Contract/NG Contract spread on the basis of block trade 

order information disclosed by Company Trader C. These events involved a total of 2,072 block 

trades executed with Company Trader C. Of these 577 events, 502 were profitable for Miller, 

resulting in a win rate of nearly 90 percent. In total, Miller generated net trading profits of 

$3,523,842 on the 577 events when he traded on the basis of Energy Company 2’s material, 

nonpublic information.

84. Miller shared the profits generated in Omerta’s trading account with Company 

Trader C, Webb, and Broker 2 in the form of cash. Miller typically delivered these cash 

payments to either Company Trader C, Webb, or Broker 2 in person in or around Houston, 

Texas. 

D. Miller and Omerta’s Trading Negated Market and Risk and Caused the Reporting 

of Non-Bona Fide Prices. 

85. By entering into and executing non-arm’s length block trades in the manner 

described above, Miller and Omerta were able to obtain more advantageous prices and negate 

market risk for Omerta’s trades with Energy Company 1 and Energy Company 2, effectively 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 31 of 44
32 

allowing Miller to select the price or prices he needed to make his HH Contract/NG Contract 

spread trading strategy profitable. 

86. As a result of entering into non-arm’s length block trades with Energy Company 1 

and Energy Company 2 that negated market risk, Miller and Omerta caused prices to be recorded 

by NYMEX for those block trades that were not true and bona fide prices. 

E. Miller Made False Statements to CME.

87. On January 18, 2017, CME interviewed Miller with respect to block trades he 

executed on behalf of Omerta, to evaluate Miller’s “pre-hedged” block trades involving the HH 

Contract by trading the NG Contract onscreen and on the opposite side of the market after 

receiving a block trade solicitation but before consummating the block trade. CME Rules at the 

time prohibited market participants from trading in the same product or a closely-related product 

on the opposite side of the market after receiving a block trade solicitation but before 

consummating the block trade. 

88. During this January 18, 2017 interview, CME Market Regulation staff questioned 

Miller about an instance in which trading records appeared to show that Miller had in fact 

entered an onscreen order to trade the NG Contract before consummating a block trade in the HH 

Contract brokered by Webb. Miller responded to this line of questioning by stating “I’m sure I 

did not [pre-hedge], because I don’t do that... I don’t pre-hedge.” Miller later stated that he only 

makes offsetting, risk-reducing (“hedge”) trades after consummating the block trades with his 

broker. 

89. Miller’s statements to CME were false. In many of the instances in which Miller 

engaged in the fraudulent scheme with Clark and Webb or the fraudulent scheme with Company 

Trader C, Webb, or Broker 2, Miller did in fact enter orders and execute trades onscreen in the 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 32 of 44
33 

NG Contract after receiving an order information for, but before consummating, a block trade in 

the HH Contract. 

90. For example, on February 17, 2016, Miller received from Webb block trade order 

information from Company Trader C for fifty lots of the March 2016 HH Contract. Miller 

bought fifty lots of the March 2016 NG Contract onscreen after receiving this information from 

Webb, but before confirming with Webb that he sold fifty lots of the March 2016 HH Contract as 

a block trade:

a. At 9:24:29 AM, Webb contacted Miller via IM requesting Miller’s price to 

sell fifty lots of the March 2016 HH Contract. 

b. At 9:25:20 AM, Webb gave Miller a bid of 1.918. 

c. At 9:25:22 AM, Miller bought fifty lots of the March 2016 NG Contract. 

d. At 9:25:25 AM, Miller told Webb “sold,” consummating the trade for fifty 

lots of the March 2016 HH Contract at a price of 1.918. 

91. Miller’s false statements to CME during his January 18, 2017 interview were 

material because they went to the heart of CME’s investigation into whether Miller engaged in 

pre-hedging of block trades by executing trades onscreen on the opposite side of the market in 

the NG Contract after receiving a solicitation for, but before consummating, a block trade in the 

HH Contract. 

F. Omerta is Vicariously Liable for Miller’s Violations of the Act and Regulations.

92. Miller was acting as Omerta’s agent when, through Omerta, he traded on the basis 

of material nonpublic information that was misappropriated from Energy Company 1 and Energy 

Company 2, and entered into fictitious trades with Company Trader A, Company Trader B, and 

Company Trader C, all for Omerta’s, and ultimately Miller’s, personal profit. Miller was also 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 33 of 44
34 

acting as Omerta’s agent when he made false statements to CME regarding trades he executed 

for the trading account owned by Omerta. 

93. Miller acted as Omerta’s agent with respect to trading. Miller was the President

of, and upon information and belief the only trader employed by, Omerta, whose primary 

occupation of business was trading. Miller’s duties therefore included trading on Omerta’s 

behalf as well as responding to inquiries from the CME and other exchanges regarding Omerta’s 

trading, and Miller’s misconduct with respect to trading was therefore both for Omerta, and 

within the scope of his agency for Omerta. 

G. Miller Was the Controlling Person of Omerta.

94. For the entirety of the Relevant Period, Miller controlled Omerta, either directly 

or indirectly, as its President, Chairman, and only trader. Miller made all trading and other 

business decisions for Omerta.

95. Miller did not act in good faith or knowingly induced, directly or indirectly, 

Omerta’s conduct by trading on the basis of material nonpublic information that was 

misappropriated from Energy Company 1 and Energy Company 2, by entering into fictitious 

trades with Energy Company 1 and Energy Company 2, through Company Traders A, B, and C, 

and by making false statements to CME regarding his trading activity on behalf of Omerta. 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 34 of 44
35 

VI. VIOLATIONS OF THE COMMODITY EXCHANGE ACT 

AND CFTC REGULATIONS

COUNT ONE

Violation of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) 

and Regulation 180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2021) 

(Misappropriation of Material Nonpublic Information) 

(Against Miller and Omerta)

96. Paragraphs 1 through 95 are realleged and incorporated herein by reference.

97. 7 U.S.C. § 9(1), provides, in relevant part: 

It shall be unlawful for any person, directly or indirectly, to use or 

employ, or attempt to use or employ, in connection with any swap, 

or a contract of sale of any commodity in interstate commerce, or 

for future delivery on or subject to the rules of any registered 

entity, any manipulative or deceptive device or contrivance, in 

contravention of such rules and regulations as the commission 

shall promulgate . . . . 

98. 17 C.F.R § 180.1(a) (2021), provides, in relevant part: 

It shall be unlawful for any person, directly or indirectly, in 

connection with any swap, or contract of sale of any commodity in 

interstate commerce, or contract for future delivery on or subject to 

the rules of any registered entity, to intentionally or recklessly:

(1) Use or employ, or attempt to use or employ, any manipulative 

device, scheme, or artifice to defraud; . . . or 

(3) Engage, or attempt to engage, in any act, practice, or course of 

business, which operates or would operate as a fraud or deceit 

upon any person . . . . 

99. As a trader and later executive for Energy Company 1, Company Trader A 

possessed material, nonpublic, and confidential information regarding Energy Company 1’s 

plans and intentions to trade natural gas futures contracts, including the quantity of and at what 

price Energy Company 1 would enter into trades in these contracts.

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 35 of 44
36 

100. As a trader and later executive for Energy Company 1, Company Trader A owed 

a duty to Energy Company 1 and was obligated to keep confidential and not misappropriate for 

his own personal benefit information regarding Energy Company 1’s trading strategy, plans, and 

intentions to trade natural gas futures contracts, including the HH Contract. The employment 

agreements, policies, and procedures governing Company Trader A’s employment with Energy 

Company 1 also required Company Trader A to keep confidential and not misappropriate for his 

own personal benefit information regarding Energy Company 1’s trading strategy and plans and 

intentions to trade natural gas futures contracts, including the HH Contract. 

101. Company Trader A breached his duty to Energy Company 1 by disclosing to 

Webb Energy Company 1’s material, nonpublic information, with the intent that Webb would 

further disclose the block trade order information to Miller, that Miller would trade on the basis 

of this information, and that Company Trader A would share in Miller’s profits from this trading. 

102. Company Trader A also breached his duty to Energy Company 1 by directing 

Company Trader B to disclose to Webb or Broker 1 Energy Company 1’s material, nonpublic 

information, with the intent that either Webb or Broker 1 would further disclose the block trade 

order information to Miller, that Miller would trade on the basis of this information, and that 

Company Trader A would share in Miller’s profits from this trading. 

103. During the Relevant Period, Miller and Omerta, in connection with contracts for 

future delivery on or subject to the rules of any registered entity, intentionally or recklessly 

traded on the basis of material, nonpublic information of Energy Company 1 as disclosed to 

Webb and Broker 1 by Company Traders A and B (at Company Trader A’s direction), and then 

by Webb and Broker 1 to Miller, in breach of Company Trader A’s pre-existing duty to Energy 

Company 1, both by entering into block trades with Energy Company 1 in the HH Contract on 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 36 of 44
37 

the basis of Energy Company 1’s confidential block trade order information, and by executing 

trades onscreen in the NG Contract also on the basis of this confidential block trade order 

information. 

104. Each fraudulent or deceptive act, including each instance in which Miller and 

Omerta misappropriated and traded on the basis of material, nonpublic information belonging to 

Energy Company 1 that Company Trader A, or Company Trader B at the direction of Company 

Trader A, disclosed to Webb or Broker 1, and then by Webb or Broker 1 to Miller, is alleged as a 

separate and distinct violation of 7 U.S.C. § 9(1), and 17 C.F.R. § 180.1(a)(1) and (3). 

105. Similarly, as a trader for Energy Company 2, Company Trader C possessed 

material, nonpublic, and confidential information regarding Energy Company 2’s plans and 

intentions to trade natural gas futures contracts, including the quantity of and at what price 

Energy Company 2 would enter into trades in these contracts. 

106. As a trader for Energy Company 2, Company Trader C owed a duty to Energy 

Company 2 and was obligated to keep confidential and not misappropriate for his own personal 

benefit information regarding Energy Company 2’s trading strategy, plans, and intentions to 

trade natural gas futures contracts, including the HH Contract. The employment agreements, 

policies, and procedures governing Company Trader C’s employment with Energy Company 2 

also required Company Trader C to keep confidential and not misappropriate for his own 

personal benefit information regarding Energy Company 2’s trading strategy and plans and 

intentions to trade natural gas futures contracts, including the HH Contract.

107. Company Trader C breached his duty to Energy Company 2 by disclosing to 

Webb and Broker 2 Energy Company 2’s material, nonpublic information, with the intent that 

Webb or Broker 2 would further disclose the block trade order information to Miller, that Miller 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 37 of 44
38 

would trade on the basis of this information, and that Company Trader C would share in Miller’s 

profits from this trading.

108. During the Relevant Period, Miller and Omerta, in connection with contracts for 

future delivery on or subject to the rules of any registered entity, intentionally or recklessly 

traded on the basis of material, nonpublic information of Energy Company 2 as disclosed to 

Webb and Broker 2 by Company Trader C, and then by Webb and Broker 2 to Miller, in breach 

of Company Trader C’s pre-existing duty to Energy Company 2, both by entering into block 

trades with Energy Company 2 in the HH Contract on the basis of Energy Company 2’s 

confidential block trade order information, and by executing trades onscreen in the NG Contract 

also on the basis of this confidential block trade order information. 

109. Each fraudulent or deceptive act, including each instance in which Miller and 

Omerta misappropriated and traded on the basis of material, nonpublic information belonging to 

Energy Company 2 that Company Trader C disclosed to Webb or Broker 2, and then by Webb or 

Broker 2 to Miller, is alleged as a separate and distinct violation of 7 U.S.C. § 9(1), and 17 

C.F.R. § 180.1(a)(1) and (3). 

COUNT TWO

Violation of Section 4c(a)(1) and (2), 7 U.S.C. § 6c(a)(1), (2)

(Fictitious Sales)

(Against Miller and Omerta)

110. Paragraphs 1 through 95 are realleged and incorporated herein by reference.

111. 7 U.S.C. § 6c(a)(1) provides: 

It shall be unlawful for any person to offer to enter into, enter into, 

or confirm the execution of a transaction described in paragraph 

(2) involving the purchase or sale of any commodity for future 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 38 of 44
39 

delivery (or any option on such a transaction or option on a 

commodity) or swap, if the transaction is used or may be used to— 

(A) hedge any transaction in interstate commerce in the 

commodity or the product or byproduct of the 

commodity; 

(B) determine the price basis of any such transaction in 

interstate commerce in the commodity; or

(C) deliver any such commodity sold, shipped, or 

received in interstate commerce for the execution of 

the transaction. 

112. 7 U.S.C. § 6c(a)(2) provides: 

A transaction referred to in paragraph (1) is a transaction that— 

(A)(i) is, is of the character of, or is commonly known to the trade 

as, a ‘wash sale’ or ‘accommodation trade’; or 

 (ii) is a fictitious sale; or

(B) is used to cause any price to be reported, registered, or 

recorded that is not a true and bona fide price. 

113. During the Relevant Period, Miller and Omerta violated 7 U.S.C. § 6c(a)(1) and 

(2) by entering into trades with Energy Company 1 executed by Company Trader A or Company 

Trader B acting at the direction of Company Trader A via Webb, Broker 1, and Classic that were 

not executed on an arm’s-length basis. Miller and Omerta also violated 7 U.S.C. § 6c(a)(1) and 

(2) by entering into trades with Energy Company 2 executed by Company Trader C via Webb, 

Broker 2, and Classic that were not executed on an arm’s-length basis. Instead the trades were 

executed at prices selected by Miller that allowed him and Omerta to generate profits trading the 

HH Contract and NG Contract as a spread. 

114. By executing trades in this manner, Miller and Omerta obtained advantageous 

prices and negated market risk.

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 39 of 44
40 

115. Miller’s and Omerta’s conduct therefore caused prices to be reported to or 

recorded by NYMEX that were not true and bona fide prices in violation of 7 U.S.C. 

§ 6c(a)(2)(B). 

116. Each fictitious sale, including but not limited to those specifically alleged herein,

is alleged as a separate and distinct violation of 7 U.S.C. § 6c(a)(1) and (2). 

COUNT THREE

Violation of Section 9(a)(4), 7 U.S.C. § 13(a)(4) 

(False Statements to CME)

(Against Miller and Omerta)

117. Paragraphs 1 through 95 are realleged and incorporated herein by reference.

118. 7 U.S.C. § 13(a)(4) makes it unlawful for: 

Any person willfully to falsify, conceal, or cover up by any trick, scheme, 

or artifice a material fact, make any false, fictitious, or fraudulent 

statements or representations, or make or use any false writing or 

document knowing the same to contain any false, fictitious, or fraudulent 

statement or entry to a registered entity, board of trade, swap data 

repository, or futures association designated or registered under this 

chapter acting in furtherance of its official duties under this chapter. 

119. CME is a registered entity as defined by 7 U.S.C. § 1a(40). 

120. On or about January 18, 2017, CME Market Regulation staff questioned Miller 

about Miller’s trading; specifically, why Miller entered an onscreen trade before confirming a 

block trade with Webb for which the onscreen trade operated as an offset. Miller stated that he 

was certain he had not entered the onscreen trade before consummating the block trade because 

he does not “pre-hedge.”

121. As part of the fraudulent schemes involving Energy Company 1 and Energy 

Company 2, Miller did in fact pre-hedge block trades in the HH Contract by executing onscreen 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 40 of 44
41 

trades on the opposite side of the market in the NG Contract after receiving order information for 

block trades in the HH Contract but before consummating that block trade. 

122. By his conduct above, Miller violated 7 U.S.C. § 13(a)(4). Because Miller made 

these false statements in the course of his employment and agency as trader for Omerta, Miller’s 

false statements are deemed false statements of Omerta pursuant to Section 2(a)(1)(B) of the Act. 

123. Each and every instance of a false, fictitious, or fraudulent statement by Miller is 

alleged herein as a separate and distinct violation of 7 U.S.C. § 13(a)(4).

VII. RELIEF REQUESTED

WHEREFORE, the CFTC respectfully requests that this Court, as authorized by Section 

6c of the Act, 7 U.S.C. § 13a-1, and pursuant to its own equitable powers: 

A. Find that Peter Miller and Omerta Capital LLC violated Sections 4c(a)(1) and (2), 

6(c)(1), and 9(a)(4) of the Act, 7 U.S.C. §§ 4c(a)(1), (2); 6(c)(1); 13(a)(4), and Regulation 

180.1(a)(1) and (3), 17 C.F.R. § 180.1(a)(1), (3) (2021). 

B. Enter an order of permanent injunction enjoining Miller and Omerta, and their 

affiliates, agents, servants, employees, successors, assigns, attorneys, and all persons in active 

concert with them, who receive actual notice of such order by personal service or otherwise, 

from engaging in the conduct described above, in violation of 7 U.S.C. §§ 4c(a)(1), (2); 6(c)(1); 

and 13(a)(4) and 17 C.F.R. § 180.1(a)(1), (3); 

C. Enter an order of permanent injunction restraining and enjoining Miller and 

Omerta, and their affiliates, agents, servants, employees, successors, assigns, attorneys, and all 

persons in active concert with them, from directly or indirectly:

1. Trading on or subject to the rules of any registered entity (as that term is 

defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40)); 

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 41 of 44
42 

2. Entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2021)), for accounts 

held in Miller’s or Omerta’s name or for accounts in which Miller or 

Omerta have a direct or indirect interest;

3. Having any commodity interests traded on Miller’s or Omerta’s behalf; 

4. Controlling or directing the trading for or on behalf of any other person or 

entity, whether by power of attorney or otherwise, in any account 

involving commodity interests;

5. Soliciting, receiving, or accepting any funds from any person for the 

purpose of purchasing or selling of any commodity interests; 

6. Applying for registration or claiming exemption from registration with the 

CFTC in any capacity, and engaging in any activity requiring such 

registration or exemption from registration with the CFTC except as 

provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2021); and 

7. Acting as a principal (as that term is defined in Regulation 3.1(a), 

17 C.F.R. § 3.1(a) (2021)), agent, or any other officer or employee of any 

person registered, exempted from registration, or required to be registered 

with the CFTC except as provided for in 17 C.F.R. § 4.14(a)(9). 

D. Enter an order requiring Miller and Omerta, as well as any third-party transferee 

and/or successors thereof, to disgorge, pursuant to such procedure as the Court may order, all 

benefits received including, but not limited to, salaries, commission, loans, fees, revenues, and 

trading profits derived, directly or indirectly, from acts or practices that constitute violations of 

the Act and Regulations as described herein, including pre-judgment and post-judgment interest;

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 42 of 44
43 

E. Enter an order requiring Miller and Omerta, as well as any successors thereof, to 

make full restitution to every person who has sustained losses proximately caused by the 

violations described herein, including pre-judgment and post-judgment interest.

F. Enter an order directing Miller and Omerta to pay a civil monetary penalty 

assessed by the Court, in an amount not to exceed the penalty prescribed by Section 6c(d)(1) of 

the Act, 7 U.S.C. § 13a-1(d)(1), as adjusted for inflation pursuant to the Federal Civil Penalties 

Inflation Adjustment Act Improvements Act of 2015, Pub. L. No. 114-74, tit. VII, § 701, 129 

Stat. 584, 599-600, see Regulation 143.8, 17 C.F.R. § 143.8 (2021), for each violation of the Act 

and Regulations, described herein;

G. Enter an order requiring Miller and Omerta to pay costs and fees as permitted by 

28 U.S.C. §§ 1920 and 2412(a)(2); and 

H. Enter an order providing such other and further relief as the Court deems proper. 

VIII. DEMAND FOR JURY TRIAL

Plaintiff hereby demands a jury trial.

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 43 of 44
44 

Dated: December 1, 2022 Respectfully submitted,

COMMODITY FUTURES TRADING 

COMMISSION

/s/ Thomas L. Simek____________________ 

Thomas L. Simek (Attorney-In-Charge) 

DC Bar No. 490030 (pro hac vice) 

tsimek@cftc.gov 

J. Alison Auxter 

MO Bar No. 59079 (pro hac vice) 

aauxter@cftc.gov 

Clemon D. Ashley

IL Bar No. 6294839 (pro hac vice) 

cashley@cftc.gov 

2600 Grand Boulevard, Suite 210 

Kansas City, MO 64108 

(816) 960-7700 (telephone) 

(816) 960-7750 (facsimile)

Case 4:21-cv-04023 Document 46 Filed on 12/01/22 in TXSD Page 44 of 44