Chicago, IL – July 6, 2015 – The U.S. Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Yumin Li, a citizen of the People’s Republic of China, and Kering Capital Ltd., a British Virgin Islands company, alleging a fraudulent trading scheme. Li is accused of misappropriating approximately $300,000 from her employer through a series of unlawful “money passes” on the Chicago Mercantile Exchange (CME).
The CFTC complaint, filed July 1, 2015, details how Li, an employee with trading privileges through her employer, allegedly engaged in fictitious transactions and non-competitive trading between March 17, 2015, and May 6, 2015. Li reportedly controlled an account belonging to Kering Capital, a company owned by her mother.
According to the complaint, Li executed trades involving Eurodollar contracts on the CME’s Globex platform. She allegedly placed matching buy and sell orders for “butterfly spreads” between her employer’s account and the Kering Capital account, manipulating the prices to ensure profits for Kering Capital and losses for her employer. These trades occurred during illiquid trading times and outside of regular CME hours, minimizing the chance of outside market participation and maximizing the success of the scheme.
The CFTC secured a restraining order from the Honorable Sara L. Ellis of the U.S. District Court for the Northern District of Illinois on July 2, 2015, freezing the defendants’ trading accounts and preventing the destruction of evidence. Kering Capital Ltd. was formed in November 2014 and is headed by Li’s mother, who serves as CEO and sole shareholder.
The CFTC is seeking restitution, civil monetary penalties, trading and registration bans, and a permanent injunction against Li and Kering Capital. The agency is pursuing these remedies to address the alleged violations of federal commodities laws. The CME Group, Inc. assisted the CFTC in this investigation.
Lindsey Evans, Melissa Cavers, David Terrell, Venice Bickham, Scott Williamson, and Rosemary Hollinger are the CFTC staff members leading the litigation.
Source: CFTC.gov
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