UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

Jie “Elaine” Yu, 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

CFTC Docket No. 23-46

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS 

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

in 2021, Jie “Elaine” Yu (“Yu” or “Respondent”) violated Section 4c(a)(2)(A)(ii) of the 

Commodity Exchange Act (“Act”), 7 U.S.C. § 6c(a)(2)(A)(ii) and Commission Regulation 

(“Regulation”) 1.38(a), 17 C.F.R. § 1.38(a) (2022). Therefore, the Commission deems it 

appropriate, and in the public interest, that public administrative proceedings be, and hereby are, 

instituted to determine whether Respondent engaged in the violations set forth herein and to 

determine whether any order should be issued imposing remedial sanctions. 

In anticipation of the institution of an administrative proceeding, Respondent has 

submitted an Offer of Settlement (“Offer”) which the Commission has determined to accept. 

Without admitting or denying any of the findings or conclusions herein, Yu consents to the entry 

of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Commodity 

Exchange Act, Making Findings, and Imposing Remedial Sanctions (“Order”) and acknowledges 

service of this Order.1

1

 Respondent agrees that the findings of fact and conclusions of law in this Order shall be taken as true and 

correct and be given preclusive effect without further proof in this proceeding and any other proceeding brought by 

the Commission or to which the Commission is a party or claimant, including but not limited to, a proceeding in 

bankruptcy or receivership. Respondent does not consent to the use of the Offer or this Order, or the findings or 

conclusions in this Order, by any other party in any other proceeding. 
2 

II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

In October and November 2021 (the “Relevant Period”), Yu engaged in a series of illegal 

transactions on the Chicago Mercantile Exchange (“CME”) involving 33 non-competitive, 

fictitious sales of 410 futures contracts. Through this illegal scheme, Yu transferred at least, 

$159,000 to her cousin, “Trader A” of Shanghai, China. 

By engaging in this conduct, Yu violated Section 4c(a)(2)(A)(ii) of the Commodity 

Exchange Act (“Act”), 7 U.S.C. § 6c(a)(2)(A)(ii), by entering into transactions that are fictitious 

sales involving the purchase or sale of any commodity for future delivery. Yu also violated 

Commission Regulation (“Regulation”) 1.38(a), 17 C.F.R. § 1.38(a) (2022), by entering into 

illegal, non-competitive fictitious transactions to buy and sell commodities for future delivery.

B. RESPONDENT 

Jie Yu (also known as “Elaine Yu”) resides in Irvine, California. Yu is registered with 

FINRA to trade securities. Yu has never been registered with the Commission in any capacity. 

C. FACTS 

During the Relevant Period, Yu entered into 33 fictitious, non-competitive sales, 

involving 410 futures contracts, with Trader A. Yu’s fictitious trading scheme focused on three 

futures contracts (1) CME Wheat Futures; (2) CME Oats Futures; and (3) CME Soybean 

Futures, all traded on CME’s Globex platform (collectively, the “Agricultural Futures”). For 

purposes of trading the Agricultural Futures at the heart of her fictitious trading scheme, Yu 

opened an account at FCM No. 1 (“Yu’s Account”). Soon thereafter, Trader A opened an 

account at FCM No. 2, for the express purpose of fictitious trading with Yu (“Trader A’s 

Account”). 

 Subsequently, Yu agreed to engage in a series of fictitious trades to move funds from her 

account to Trader A’s Account by trading, in concert, illiquid Agricultural Futures. Yu and 

Trader A worked in tandem, closely coordinated their trading, and synchronized their fictitious 

sales by communicating in real time about their bids and offers. Yu intentionally entered orders 

during periods of low overall trading volume with the express purpose of finding and matching 

Trader A’s opposite orders on CME Globex. Likewise, Yu consistently entered orders 

immediately after Trader A’s orders and aggressively “priced into” Trader A’s orders by 

crossing the bid-ask spread. Ultimately, Yu entered into 33 fictitious sales, involving 410 

Agricultural Futures contracts, with Trader A. As a result of these trades, over $159,000 was 

transferred from Yu’s Account to Trader A’s Account. 

 For example, on November 1, 2021 at approximately 12:40 a.m. (00:40:41.322, as 

represented in the CME trading data; all times are expressed in Central Time), Trader A placed 

an order to sell 15 contracts of July 2024 Wheat Futures at $7.2875 per bushel (there are 5,000 

bushels per contract) at FCM No. 2. At approximately 12:41 a.m. (00:41:12.324), Yu placed an 
3 

order to buy 10 contracts of July 2024 Wheat Futures, at $7.29 per bushel at FCM No. 1. 

Instantaneously, the two orders matched on the CME at $7.2875 for 10 contracts. 

 Approximately thirty-eight seconds later at 00:41:50.451(12:41 a.m.), Trader A placed an 

order to buy 10 contracts of July 2024 Wheat Futures at $7.1625 per bushel. Less than a minute 

later, at 00:42:43.843 (12:42 a.m.), Yu placed an order to sell 10 contracts of July 2024 Wheat 

Futures at $7.16 per bushel. At approximately 00:42:43.843 (12:42 a.m.), the two orders 

matched on the CME at $7.1625. This series of trades resulted in the transfer of approximately 

$6,250 from Yu’s Account to Trader A’s Account. 

III. LEGAL DISCUSSION 

Section 4c(a) of the Act, 7 U.S.C. § 6c(a), provides that it is unlawful for any person to 

enter into a transaction that: 

(i) is, is of the character of, or is commonly known to the trade as, 

a ‘wash sale’ or ‘accommodation trade’; or 

(ii) is a fictitious sale. 

A fictitious sale is a general category that includes, at a minimum, the unlawful practices 

specifically enumerated in Section 4c(a), as well as prearranged trading. In re Thomas Collins, 

CFTC No. 94-13, 1997 WL 761927, at *7 (Dec. 10, 1997). The Commission has held that “the 

central characteristic of the general category of fictitious sales is the use of trading techniques 

that give the appearance of submitting trades to the open market while negating the risk of price 

competition incident to such a market.” In re Harold Collins, CFTC No. 77-15, 1986 WL 66165 

at *8 (Apr. 4, 1986) (holding that illegitimate prearranged trading is a form of fictitious sale 

“[b]y determining trade information such as price and quantity outside the pit, then using the 

market mechanism to shield the private nature of the bargain from public scrutiny, both price 

competition and market risk are eliminated.”), rev’d on other grounds sub nom. Stoller v. CFTC, 

834 F.2d 262 (2d Cir. 1987). “By enacting Section 4c(a), Congress sought to ensure that all 

trades are focused in the centralized marketplace to participate in the competitive determination 

of the price of the futures contracts.” In re Thomas Collins, 1997 WL 761927, at *6 (quoting S. 

REP. NO. 93-1131, at 16-17 (1974)) (internal quotation marks omitted). 

During the Relevant Period, Yu entered into a series of fictitious sales to shift funds from 

her account to Trader A’s Account by trading, in concert, illiquid Agricultural Futures. Yu and 

Trader A worked in tandem, closely coordinated their trading, and synchronized their fictitious 

sales by communicating in real time about their bids and offers. Yu intentionally engaged in 

trading activity that lacked both price competition and market risk for the sole purpose of passing 

funds to Trader A’s Account. Consequently, Yu violated Section 4c(a)(2)(A)(ii) of the Act, 7 

U.S.C. § 6c(a)(2)(A)(ii) by engaging in a series of illegal transactions on the CME involving at 

least 33 fictitious sales involving 410 Agricultural Futures contracts. 

 Similarly, Regulation 1.38(a) provides that “[a]ll purchases and sales of any commodity 

for future delivery . . . on or subject to the rules of a contract market shall be executed openly 

and competitively . . . .” 17 C.F.R. § 1.38(a) (2022). By engaging in fictitious trading—

executed trades that, by definition, were not subject to the competitive forces of the market— 
4 

Respondent intentionally engaged in noncompetitive trading. As set forth above, such trading 

conduct negates the risk incident to a market and, as a result, Respondent’s trading activity 

during the Relevant Period violated Regulation 1.38. See In re Harold Collins, 1986 WL 66165 

at *8. 

IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, Yu 

violated Section 4c(a)(2)(A)(ii) of the Act, 7 U.S.C. § 6c(a)(2)(A)(ii) and Regulation 1.38(a), 17 

C.F.R. § 1.38(a) (2022). 

V. OFFER OF SETTLEMENT 

Respondent Yu has submitted the Offer in which, without admitting or denying the 

findings and conclusions: 

A. Acknowledges service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waives: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that it may possess under the Equal Access to Justice Act, 5 

U.S.C. § 504 and 28 U.S.C. § 2412, and/or the rules promulgated by the 

Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. pt. 

148 (2022), relating to, or arising from, this proceeding; 

7. Any and all claims that it may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201-253, 110 

Stat. 847, 857-74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and 
5 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 

D. Acknowledges that the Commission is the prevailing party in this action for purposes of 

the waiver of any and all rights under the Equal Access to Justice Act and the Small 

Business Regulatory Enforcement Fairness Act of 1996, specified in subparts 6 and 7 of 

Paragraph C of this Section; 

 

E. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Yu has consented in the Offer; 

F. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Yu violated Section 4c(a)(2)(A)(ii) of the 

Act, 7 U.S.C. § 6c(a)(2)(A)(ii) and Regulation 1.38(a), 17 C.F.R. § 1.38(a) 

(2022); 

2. Orders Yu to cease and desist from violating Section 4c(a)(2)(A)(ii) of the Act, 7 

U.S.C. § 6c(a)(2)(A)(ii) and Regulation 1.38(a), 17 C.F.R. § 1.38(a) (2022); 

3. Orders Yu to pay a civil monetary penalty in the amount of three-hundred 

thousand dollars ($300,000.00) within fourteen days of the date of the entry of 

this Order, plus post-judgment interest, if applicable; 

4. Orders that Yu is prohibited from, directly or indirectly, engaging in trading on or 

subject to the rules of any registered entity (as that term is defined in Section 

1a(40) of the Act, 7 U.S.C. § 1a(40), for a period of six months after the date of 

entry of this Order, and all registered entities shall refuse Respondent’s trading 

privileges; and 

5. Orders Yu and her successors and assigns to comply with the conditions and 

undertakings consented to in the Offer and as set forth in Part VI of this Order, 

Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Yu shall cease and desist from violating Section 4c(a)(2)(A)(ii) of the Act, 7 U.S.C. § 

6c(a)(2)(A)(ii) and Regulation 1.38(a), 17 C.F.R. § 1.38(a) (2022); 

B. Yu is prohibited from, directly or indirectly, engaging in trading on or subject to the rules 

of any registered entity (as that term is defined in Section 1a(40) of the Act, 7 U.S.C. § 
6 

1a(40), for a period of six months after the date of entry of this Order, and all registered 

entities shall refuse Respondent’s trading privileges; and 

C. Yu shall pay a civil monetary penalty in the amount of three hundred thousand dollars 

($300,000.00) (the “CMP Obligation”) within fourteen days of the date of the entry of 

this Order. If the CMP Obligation is not paid in full within fourteen days of the date of 

entry of this Order, then post-judgment interest shall accrue on the CMP Obligation 

beginning on the date of entry of this Order and shall be determined by using the 

Treasury Bill rate prevailing on the date of entry of this Order pursuant to 28 U.S.C. 

§ 1961. 

Yu shall pay the CMP Obligation and any post-judgment interest by electronic funds 

transfer, U.S. postal money order, certified check, bank cashier’s check, or bank money 

order. If payment is to be made other than by electronic funds transfer, the payment shall 

be made payable to the Commodity Futures Trading Commission and sent to the address 

below: 

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

HQ Room 181 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 facsimile 

9-AMC-AR-CFTC@faa.gov 

If payment is to be made by electronic transfer, Yu shall contact Tonia King or her 

successor at the above address to receive payment instructions and shall fully comply 

with those instructions. Yu shall accompany payment of the CMP Obligation with a 

cover letter that identifies Yu and the name and docket number of this proceeding. Yu 

shall simultaneously transmit copies of the cover letter and the form of payment to the 

Chief Financial Officer, Commodity Futures Trading Commission, Three Lafayette 

Centre, 1155 21st Street, N.W., Washington, DC 20581. 

D. Yu and her successors and assigns shall comply with the following conditions and 

undertakings set forth in the Offer: 

1. Public Statements: Yu agrees that neither she nor any of her successors, assigns, 

agents, or employees under her authority or control shall take any action or make 

any public statement denying, directly or indirectly, any findings or conclusions 

in this Order or creating, or tending to create, the impression that this Order is 

without a factual basis; provided, however, that nothing in this provision shall 

affect Yu’s and/or her agents’ and/or employees’ (i) testimonial obligations; or 

(ii) right to take positions in other proceedings to which the Commission is not a 

party. Yu and her successors and assigns shall comply with this Order, and shall 
7 

undertake all steps necessary to ensure that all of her agents and/or employees 

under her authority or control understand and comply with this agreement. 

2. Trading Ban: Yu agrees that she shall not, for a period of six months from the date 

of entry of this Order, directly or indirectly: 

a. enter into any transactions involving “commodity interests” (as that term is 

defined in Regulation 1.3, 17 C.F.R. § 1.3 (2022)) for her own personal 

accounts or for any accounts in which she has a direct or indirect interest; 

b. have any commodity interests traded on her behalf; 

c. control or direct the trading for or on behalf of any other person or entity, 

whether by power of attorney or otherwise, in any account involving 

commodity interests; 

d. solicit, receive, or accept any funds from any person for the purpose of 

purchasing or selling any commodity interests; 

e. apply for registration or claim exemption from registration with the 

Commission in any capacity, and engage in any activity requiring such 

registration or exemption from registration with the Commission except as 

provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2022); 

and/or 

f. act as a principal (as that term is defined in Regulation 3.1(a), 17 C.F.R. 

§ 3.1(a) (2022)), agent or any other officer or employee of any person (as 

that term is defined in Section 1a(38) of the Act, 7 U.S.C. § 1a(38)), 

registered, required to be registered, or exempted from registration with 

the Commission except as provided for in Regulation 4.14(a)(9). 

3. Cooperation, In General: Respondent shall cooperate fully and expeditiously with 

the Commission, including the Commission’s Division of Enforcement, in this 

action, and in any current or future Commission investigation or action related 

thereto. Respondent shall also cooperate in any investigation, civil litigation, or 

administrative matter related to, or arising from, the subject matter of this action. 

4. Partial Satisfaction: Yu understands and agrees that any acceptance by the 

Commission of partial satisfaction of her CMP Obligation shall not be deemed a 

waiver of her obligation to make further payments pursuant to this Order or a 

waiver of the Commission’s right to seek to compel payment of any remaining 

balance. 

5. Change of Address: Until such time as Yu satisfies in full her CMP Obligation as 

set forth in this Order, Yu shall provide written notice to the Commission by