A commodity trading company agreed to pay $2 million to settle CFTC charges of (i) holding net futures positions that exceeded speculative position limits, (ii) engaging in wash trading through the exchange of futures for physical transactions ("EFPs"), and (iii) filing inaccurate monthly statements with the CFTC.
According to the CFTC Order, Glencore Grain B.V. and Glencore Ltd. (collectively, "Glencore") operated cotton trading under common control, yet failed to aggregate their cotton futures positions as required for compliance with CFTC position limits. The CFTC found that, when appropriately aggregated, Glencore's cotton futures positions exceeded the limits on several occasions in 2013 and 2014. In addition, the CFTC found that Glencore executed EFPs between its two affiliate companies in spite of the fact that the companies' commodity accounts were not independently controlled. Accordingly, the CFTC determined that Glencore had violated the rules against noncompetitive trading. Finally, the CFTC found that Glencore had made two Form 304 filings in which it inaccurately represented its short cash sales commitments.
Glencore neither admitted nor denied the CFTC findings in connection with the settlement.
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