Chicago, IL – Dichao Xie, a Chinese national, is facing charges of insider trading and market manipulation following a complaint filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Northern District of Illinois. The CFTC alleges Xie misused confidential information from his employer to illegally profit from trades in feeder cattle futures and options.
According to the complaint, from approximately December 2021 to April 2022, Xie, a quantitative trader at a large multinational corporation, accessed and exploited non-public information regarding his employer’s trading positions. He then executed trades through his personal account, effectively trading against his employer and generating a profit of approximately $178,075.
The CFTC contends Xie violated the Commodity Exchange Act (CEA) and related regulations by breaching his duty to his employer and engaging in fictitious and noncompetitive trades. Specifically, the complaint details at least 71 transactions where Xie traded as a counterparty to his employer, often within seconds of the company’s own trades being executed.
“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,” stated Ian P. McGinley, Director of Enforcement at the CFTC. “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.”
The CFTC is seeking civil monetary penalties, disgorgement of ill-gotten gains, restitution, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations. The case is being prosecuted by Ben Sedrish, Matthew Edelstein, Allison V. Passman, William Janulis, Scott Williamson, and Robert T. Howell of the CFTC’s Division of Enforcement, with assistance from the Insider Trading Task Force.
Individuals with information regarding potential violations of commodity trading laws are encouraged to contact the CFTC via its toll-free hotline (866-FON-CFTC), online tip submission portal, or the CFTC Whistleblower Office. Whistleblowers may be eligible to receive a percentage of monetary sanctions collected.
Source: CFTC.gov
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