For Release: April 26, 2007
Washington, D.C. — The U.S. Commodity Futures Trading Commission (CFTC) announced today that it filed and simultaneously settled charges under the Commodity Exchange Act (CEA) against Pak Tong Lui (a/k/a Patrick Lui) of Flushing, New York. Lui, while controlling and trading at least 27 different customer accounts, knowingly prearranged trades on behalf of several accounts in E-mini Russell 2000 futures contracts traded on the Chicago Mercantile Exchange's Globex electronic trading platform.
The CFTC order finds that Lui, who was not registered with the Commission, traded at least fifteen customer accounts opposite each other in the E-Mini Russell 2000 futures contract during thinly traded overnight hours in November and December 2005. The electronic trading resulted in eleven of the fifteen customer accounts losing an aggregate of $55,505 and the remaining four accounts realizing profits of roughly the same aggregate amount.
The CFTC found that these prearranged trades negated market risk and price competition, and therefore constituted both fictitious sales under the CEA and noncompetitive trades under CFTC regulations. Lui also was found to have illegally traded customer accounts without being properly registered with the CFTC as a commodity trading advisor.
The order, among other things, requires Lui to pay a $30,000 civil penalty; repay $55,505 to the customers who lost money as a result of the prearranged trading; and obliges Lui to comply with specific undertakings, including not to apply for, or seek exemption from, registration with the CFTC for a period of four years.
The following Division of Enforcement staff were responsible for this case: William Janulis, Michael Tallarico, Rosemary Hollinger, Scott Williamson, and Richard Wagner.
Last Updated: May 8, 2007