09/27/2023 | Press release | Distributed by Public on 09/27/2023 08:58
September 27, 2023
The order resolves a CFTC action filed on March 28, 2023. [See CFTC Press Release No. 8682-23.] The order finds, among other things, that Xie defrauded his former employer by misappropriating its confidential information to enter noncompetitive trades against it.
The order requires Xie to disgorge his ill-gotten gains, amounting to $175,772.40, and to pay a civil monetary penalty in the same amount. The order also permanently prohibits Xie from engaging in further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged, and imposes five-year trading and registration bans.
The order finds that, from approximately December 2021 to April 2022, Xie, a quantitative trader at a large, multinational corporation, misappropriated material, non-public information from his employer to fraudulently and deceptively enter into trades of feeder cattle futures and options for his personal benefit.
As the order states, in connection with his role at the company, Xie had access to his employer's options and futures positions and associated orders for feeder cattle. The order finds that in breach of his duties to his employer, 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 in at least 71 transactions. In addition, the order finds that Xie entered many of the transactions on his own behalf, 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, 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 complaintonline, or contact the CFTC Whistleblower Office at whistleblower.gov. Whistleblowers may be 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.