A Chinese citizen has been ordered to pay over $390,000 in penalties and disgorgement for engaging in a fraudulent scheme involving the Chicago Board of Trade, the Commodity Futures Trading Commission announced Wednesday.
U.S. District Judge Sherilyn Peace Garnett of the Central District of California granted the CFTC’s motion for default judgment against Yueyu Bao, finding he engaged in a series of fictitious sales in October and November 2021. Bao was ordered to pay a $260,140 civil monetary penalty and disgorge $130,070 in ill-gotten gains. He is also permanently banned from trading in CFTC-regulated markets and registering with the agency.
According to the court’s findings, Bao coordinated 33 non-competitive, fictitious sales of 410 futures contracts. The scheme involved transferring $130,070 from the trading account of his cousin, identified as “Trader A,” to his own account. The two allegedly worked in tandem, communicating about bids and offers to synchronize their trades on the CBOT’s Globex platform.
Investigators found that Bao intentionally executed the trades during periods of low volume, specifically to match orders with his cousin. The activity lacked genuine price competition or market risk, existing solely to transfer funds between the accounts. This conduct violated the fictitious sales provisions of the Commodity Exchange Act and related CFTC regulations.
The CFTC initiated the enforcement action with a complaint filed January 16, 2024. The CME Group provided assistance during the investigation. Jennifer Blakley, Dmitriy Vilenskiy, Chrystal Gonnella, Derek S. Hammond, James H. Holl III, A. Daniel Ullman II, and Paul G. Hayeck of the CFTC’s Division of Enforcement were responsible for the case.
Source: CFTC.gov
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