Aggregated News From Investment Management Regulators

CFTC Charges Chinese National with Fraudulent Scheme to Trade Against Employer


Please complete the required fields.

Washington, D.C. — The Commodity Futures Trading Commission today announced it filed a complaint in the U.S. District Court for the Northern District of Illinois charging Dichao Xie, a Chinese national, with a fraudulent scheme in which he misused knowledge of his employer’s trading in feeder cattle futures and options to trade for his own benefit in breach of a duty to his employer. Xie’s trades also constituted illegal fictitious and noncompetitive trades under the Commodity Exchange Act (CEA) and CFTC regulations, according to the complaint.

The complaint seeks, among other relief, civil monetary penalties, disgorgement of any ill-gotten gains, restitution, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations, as charged.

“When market participants steal non-public information to trade for their personal benefit, they defraud the sources of the information and gain an unfair advantage,” said Director of Enforcement Ian P. McGinley. “The CFTC is committed to maintaining the integrity of our commodities markets, and we will continue to focus on rooting out the unlawful misappropriation and misuse of confidential information.”

Case Background

The complaint alleges that from approximately December 2021 to April 2022, Xie, a quantitative trader at a large, multinational corporation, engaged in a fraudulent scheme to misappropriate material, non-public information from his employer in breach of a duty to that employer. Xie misused that information to fraudulently and deceptively enter into trades of feeder cattle futures and options for his personal benefit.

In connection with his role at the company, Xie had access to—and, on many occasions, himself entered—his employer’s options and futures positions and associated orders in a number of agricultural commodities, including feeder cattle. In breach of his duties to his employer and in violation of agreements Xie made not to use his employer’s confidential business information for personal gain, Xie used material, non-public information to execute transactions on feeder cattle futures and options through his personal trading account as a counterparty to his employer. Xie entered into at least 71 such transactions, which generated a profit to him of approximately $178,075. In addition, Xie entered many of the transactions on his own behalf within seconds of entering the employer’s transaction, in a manner constituting fictitious and noncompetitive trades.

The Division of Enforcement staff responsible for this matter are Ben Sedrish, Matthew Edelstein, Allison V. Passman, William Janulis, Scott Williamson, and Robert T. Howell. The Division of Enforcement’s Insider Trading Task Force also provided assistance.

 * * * * * * *

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.  

This news item was originally published by the Commodity Futures Trading Commission (CFTC US). For more information, see the Source Link.

Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

Recent Articles

“We’ve Seen This Story Before” Remarks before the Piper Sandler Global Exchange & Fintech Conference

Washington D.C. Thank you, Rich, for that kind introduction.

OCC Hosts Risk Governance and Capital Markets Workshops in Denver

  • +1Bank Management, Banker Education, Board of Directors & Management, Community Banks, Operational Risk Management
WASHINGTON—The Office of the Comptroller of the Curren

SEC, NASAA, FINRA to Co-Host Webinar on Identifying and Reporting Suspected Senior Financial Exploitation

Regulators to Discuss Protecting Seniors During World Elder Abuse Awareness Day WASHINGTON—The Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASA

Financial sector’s capital position as at 31 March 2023: The Finnish financial sector’s capital position has remained good – risks in the operating environment...

The state of the Finnish financial sector has remained good in the early months of the year, despite the continued high level of risks...

Notification For The 2023 Capital Market Committee 2nd Webinar Meeting

The Director General has approved the 2023 Capital Market Committee (CMC) 2nd Webinar Meeting to hold on Wednesday, 23rd, August 2023. The usual interface with...

Get the latest from Regulatory.News in your inbox!