Australian futures trader gets to pay no restitution in spoofing case
The Honorable John J. Tharp, Jr of the Illinois Northern District Court says no restitution will be ordered in the case against Jiongsheng “Jim” Zhao.
Jiongsheng “Jim” Zhao, an Australian trader convicted of spoofing, is set to pay no restitution in the US criminal case against him.
On February 10, 2020, the Honorable John J. Tharp, Jr of the Illinois Northern District Court granted the government’s unopposed motion to finalize restitution. The Judge explained that, in light of the full payment of the victim compensation amount by Propex Derivatives Pty Ltd, the former employer of Zhao, no further restitution is due and no restitution will be ordered in this case.
On January 21, 2020, the US government entered into a deferred prosecution agreement (DPA) with Zhao’s former employer, Propex Derivatives Pty Ltd, to resolve criminal charges related Zhao’s unlawful trading activity. As part of the DPA, inter alia, Propex agreed to pay a victim compensation amount of $464,300 on or before February 11, 2020.
On February 6, 2020, Propex wired the $464,300 victim compensation payment under the DPA to an account administered by the government.
In the document filed with the Court on February 7, 2020, the government notified the Court that Propex had made its victim compensation payment pursuant to the DPA. As FinanceFeeds reported, the government last week requested that the Court enter an order stating that no restitution is ordered in this case because defendant’s restitution obligation has been satisfied in full by Propex’s payment.
Earlier in February, Zhao was sentenced to time served at the Illinois Northern District Court.
According to the charges, from at least 2012, Zhao was employed as a trader at Propex, a proprietary trading firm located in Sydney, Australia and elsewhere. As a trader at Proper, Zhao traded futures contracts, including the E-mini S&P 500 futures contract on the Chicago Mercantile Exchange (CME).
The US authorities alleged that, as a part of Zhao’s spoofing conduct, beginning in approximately July 2012 and continuing through approximately March 2016, he devised, implemented, and executed a trading strategy involving E-Mini S&P futures contracts in which he entered large-volume orders he intended, at the time he placed the orders, to cancel before they could be filled by other traders and which were transmitted to the Globex electronic trading platform that operated on a CME Group server.
On January 29, 2018, Zhao was arrested by the Australian Federal Police and remanded into custody pending extradition. On November 19, 2018, after his extradition to the United States, Zhao made an initial appearance before Magistrate Judge Young B. Kim. In December 2018, Zhao pleaded guilty to spoofing charges.