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United States CFTC v. Song

United States District Court for the Southern District of New York

April 11, 2011, Decided; April 11, 2011, Filed

10 Civ. 2931 (NRB)

Opinion

CONSENT ORDER OF PERMANENT INJUNCTION AND ANCILLARY EQUITABLE RELIEF UNDER THE COMMODITY EXCHANGE ACT AGAINST DEFENDANT KUEN CHEOL SONG

On April 6, 2010, Plaintiff, U.S. Commodity Futures Trading Commission (the "Commission" or "CFTC"), filed a Complaint for injunctive and other relief against Defendant Kuen Cheol Song ("Song" or the "Defendant") seeking injunctive and other equitable relief for violations of Sections 4c(a) of the Commodity Exchange Act (the "CEA" or "Act"), as amended by the Commodity Futures Trading Commission Reauthorization Act (the "CRA"), 7 U.S.C. §§ 6c(a) [*2] ; and Commission Regulation 1.38(a), 17 C.F.R, § 1.38(a) (2010).

The Complaint alleges that Defendant Song engaged in a series of illegal commodity futures transactions involving Natural Gas and Heating Oil contracts on NYMEX. The Complaint further alleges that Song controlled two accounts for trading on the New York Mercantile Exchange ("NYMEX"): (1) his personal account, held at one Futures Commission Merchant ("FCM") (the "Personal Account"), and (2) an account on behalf of his employer, Woori Absolute Partners ("Woori"), named the "Woori Absolute Global Opportunity Fund," held at another FCM (the "WAGOF" Account). Additionally, the Complaint alleges that Defendant Song repeatedly made fictitious, non-competitive trades between his Personal Account and the WAGOF Account, both of which he controlled, whereby Song's personal account virtually always profited at the expense of the WAGOF Account.

The Court entered an Ex Parte Statutory Restraining Order on April 6, 2010 freezing Defendant Song's assets, prohibiting him from destroying or altering any books, records or documents, and ordering him to show cause why a preliminary injunction should not be entered. On April 28, 2010, the Court held a hearing to show [*3]  cause why a preliminary injunction should not be entered. The Court subsequently entered an order on May 3, 2010, modifying certain terms in the April 6, 2010 Restraining Order, and thereafter, on July 7, 2010, the Court issued another Order further modifying certain terms in the April 6, 2010 Restraining Order, and further ordering defendant Song to comply with his agreement and undertaking not to violate Section 4c(a) of the Act, 7 U.S.C. § 6c(a) (2006), and Commission Regulation 1.38(a), 17 C.F.R. § 1.38(a)(2010).

I. CONSENT AND AGREEMENT

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2011 U.S. Dist. LEXIS 158437 *

U.S. COMMODITY FUTURES TRADING COMMISSION, Plaintiff, v. KUEN CHEOL SONG, Defendant.

CORE TERMS

commodity, personal account, trading, consent order, contracts, orders, natural gas, Regulation, buy, transactions, injunctive, options, funds, Disgorgement, monetary penalty, interstate commerce, registration, electronic, delivery, Notice, agrees, series of transactions, engaging, freezing, prices, volume, terms