Chenli Chu v. US Commodity Futures Trading Comm’n

Plaintiff, a retiree with significant trading experience, received $500,000 following her husband’s death. After consulting with Jennifer Huang, her long-time commodity trading advisor, and James Kelly, an account executive at her futures commission merchant (FCM), Peregrine, plaintiff decided to place the funds in a new account with Peregrine. Plaintiff subsequently filed suit claiming that Kelly and Peregrine disregarded her account instructions and permitted Huang to conduct unauthorized trades in the account, in violation of 7 U.S.C. 6b(a) and 17 C.F.R. 166.2–166.3. The ALJ ruled in favor of plaintiff, but the CFTC reversed. Applying a substantial evidence standard, the court concluded that substantial evidence supports the CFTC’s decision that Kelly made no material misrepresentation or omission, that there was no unauthorized trading, and that the record does not support a finding of fraud. Accordingly, the court denied the petition for review. View "Chenli Chu v. US Commodity Futures Trading Comm'n" on Justia Law