Aruba-based futures trading company Copersucar Trading A.V.V. ("Copersucar"), a subsidiary of a Brazilian sugar and ethanol company, settled CFTC charges that it executed wash trades and prearranged noncompetitive trades.
In an Order Instituting Proceedings, the CFTC alleged that Copersucar engaged in multiple wash trades in Sugar No. 11 futures Trade at Settlement contracts traded on the ICE Futures U.S. Exchange, a designated contract market. The CFTC alleged that Copersucar entering into "equal and opposite" orders for the same product in different accounts that were each owned by Copersucar. As a result, the CFTC charged that Copersucar "negated the risk incidental to an open and competitive marketplace." According to Copersucar, the trades were executed in order to consolidate positions into a single trading account. In addition to charging Copersucar with executing wash trades in violation of CEA Section 4c(a)(1), the CFTC alleged that the firm violated CFTC Regulation 1.38(a) by "knowingly structuring and entering into prearranged noncompetitive trades."
Copersucar eventually adjusted its business operations in a manner that decreased the need to consolidate positions, and contended that it instituted new policies and procedures to reduce the risk of future violations. In accepting Copersucar's settlement offer of $300,000, the CFTC noted that Copersucar "cooperated fully" with the CFTC investigation.
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