Release #4130-98 (CFTC Docket No. 98-10)
For Release: April 2, 1998
CFTC FILES ADMINISTRATIVE COMPLAINT AGAINST CMB CAPITAL MANAGEMENT CORP., GRACE HSU, AND ALLEN TSUI, CHARGING FRAUD BY UNAUTHORIZED TRADING AND FAILURE TO DISCLOSE TRADING RISKS, AMONG OTHER VIOLATIONS OF FEDERAL COMMODITY LAW AND CFTC REGULATIONS
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the filing of a three-count administrative complaint against CMB Capital Management Corporation (CMB) of Flushing, New York, its president, Grace Hsu also of Flushing, and another individual, Allen Tsui of Jamaica, New York, alleging violations of the anti-fraud provisions of the Commodity Exchange Act (CEA) and CFTC regulations. CMB is registered with the CFTC as an Introducing Broker, and both Hsu and Tsui are currently registered as Associated Persons.
Specifically, the CFTC complaint, filed on March 31, 1998, charges the respondents with fraud for failing to disclose material information about margin calls, misrepresenting the reasons the customers were required to change their clearing futures commission merchant, failing to disclose the risks of futures trading, and trading customer accounts without authorization.
The CFTC complaint alleges that from December of 1996 through June of 1997, CMB, Hsu, and Tsui solicited customers without providing them the required risk disclosures, or by providing the required risk disclosure documents in a language that the customers could not read.
Further, the CFTC complaint alleges that in 1997, Hsu and CMB engaged in a series of unauthorized trades, resulting in losses to CMB clients of more than $145,000.
A Public Hearing Has Been Ordered
A public hearing has been scheduled to determine whether the allegations are true and, if so, to determine what sanctions, if any, are appropriate and in the public interest.
Possible sanctions include cease and desist orders prohibiting further violations of provisions of the CEA and CFTC regulations as charged; revocation, restriction or suspension of registration; a trading prohibition; restitution; and civil monetary penalties of not more than the higher of $110,000 or triple the monetary gain to the respondent for each violation of the CEA or CFTC regulations.