CFTC Levels Charges in Illegal Trading Scheme

The CFTC charged Kering Capital Ltd. ("Kering Capital") and a citizen of the People's Republic of China (the "Citizen") with fraud by engaging in fictitious transactions and noncompetitive trading.

According to the CFTC's complaint (the "Complaint"), the Citizen and Kering Capital engaged in a series of unlawful "money passes" (a kind of noncompetitive trading in which one trader loses money to another intentionally) involving the Eurodollar contract traded on the CME's electronic Globex Platform. As alleged in the Complaint, the Citizen structured the transactions so that her employer's account would always buy at higher prices and sell at lower prices opposite the account controlled by the Citizen at Kering Capital. As a result, the Kering Capital account profited and her employer's account incurred a loss.

The Complaint further alleged that the Citizen misappropriated approximately $300,000 from her employer against the account belonging to Kering Capital that the citizen controlled.

See: CFTC Complaint: Citizen and Kering Capital Ltd.; Statutory Restraining Order.