The US Commodity Futures Trading Commission (CFTC) has obtained USD615,000 in disgorgement and a civil monetary penalty in a federal court consent order against defendant Kuen Cheol Song, who resided in Singapore during the relevant time period, for engaging in an illegal, fictitious trading scheme. Song has never been registered with the CFTC.
The consent order, entered on April 11, 2011, 2011, by the Honorable Naomi Reice Buchwald of the US District Court for the Southern District of New York, requires Song to pay USD475,000 in disgorgement and a $140,000 civil monetary penalty. The order permanently bans Song from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.
According to the order, Song controlled and traded his personal account and the Woori Absolute Global Opportunity Fund (WAGOF) account of his employer, Singapore-based Woori Absolute Partners. The order finds that, starting on August 28, 2009, Song engaged in a series of natural gas and heating oil futures transactions executed on the New York Mercantile Exchange’s (NYMEX’s) Globex trading platform during which Song “repeatedly, illegally, and self-servingly, traded futures contacts between his personal account and the WAGOF account.” Song also engaged in a similar trading pattern with cotton, corn, soybean and wheat futures, according to the order.
By consistently executing trades between his personal account and the WAGOF account during periods of low volume in order to pass money from the WAGOF account to his personal account, Song entered into transactions without intent to take a genuine, bona fide position in the market, the order finds. In total, Song’s personal account gained approximately USD475,000 based on his illegal commodity transactions, while the WAGOF account lost approximately USD475,000, according to the order.