BEIJING/WASHINGTON (Reuters) - China-based Sheenson Investments Ltd and a stakeholder agreed to pay $1.5 million to settle U.S. charges that it violated rules on the size of positions traders can hold in the cotton and soybean futures markets, a U.S. regulator said on Tuesday.
Sheenson Investments exceeded position limits in the soybean oil market in February and March 2009, the U.S. Commodity Futures Trading Commission said in a brief release on the unusually large fine.
The CFTC order also found that Weidong Ge, through his ownership interest in Hong Kong-registered Sheenson and other firms, exceeded limits in the cotton market from January through February 11, 2011.
Ge’s operations include a commodities-focused fund in China, Shanghai Chaos Investment Co Ltd, as well as a firm that trades securities and financial derivatives.
Shanghai Chaos Investment's website gave no details on its assets under management, although it said returns have averaged around 120 percent since Ge founded it in 2005, while industry participants estimated it manages billions of yuan (hundreds of millions of dollars). (www.chaoschina.com/)
Ge could not be reached for comment. Shanghai Chaos Investment declined to comment.
Shanghai Chaos Investment holds accounts with a number of foreign brokerages to trade on overseas exchanges, sources at those brokerages said.
Chinese investors are keen to tap investment opportunities in overseas markets, although their options are restrained by China’s strict capital controls.
Reporting By Alexandra Alper in Washington, Niu Shuping and Tracy Zheng in Beijing; Editing by Edmund Klamann