The Wall Street Journal recently quoted Mayer Brown Partner Matthew F. Kluchenek regarding a federal judge's demand that the new chairman and two commissioners of the Commodity Futures Trading Commission ("CFTC") testify in response to a motion for contempt and sanctions. U.S. District Court for the Northern District of Illinois Judge John Robert Blakey ordered CFTC Chairman Heath Tarbert to testify about agency statements regarding a $16 million consent order ("Consent Order")1 with Kraft Foods Group Inc. and Mondelez Global LLC ("Kraft and Mondelez") to settle a 2015 complaint that alleged wheat market manipulation.2
The August 14th Consent Order contained no findings, but enjoined Kraft and Mondelez from engaging in future violations of the manipulation, wash trade, and position limit provisions of the Commodity Exchange Act and related CFTC rules. Among other terms, the Consent Order included a provision in Section I, paragraph 8, which stated that, "[n]either party shall make any public statement about this case other than to refer to the terms of this settlement agreement or public documents filed in this case, except any party may take any lawful position in any legal proceedings, testimony or by court order."3 Such a provision in a Consent Order is unusual.
On August 15th, the date Judge Blakey entered his judgment, CFTC issued a press release that included a statement from Chairman Tarbert regarding the Consent Order and published a separate statement by the CFTC and a joint statement by Democratic Commissioners Dan Berkovitz and Rostin Benham. In response, Kraft and Mondelez filed a Motion for Contempt, Sanctions, and Other Relief against the CFTC, which has been sealed.4 The CFTC responded on August 17.5 In an emergency hearing, the CFTC agreed to remove the press release and statements from its website and Judge Blakey ordered Chairman Tarbert and Commissioners Berkovitz and Benham to testify at a hearing scheduled for September 12.6 The CFTC and Commissioners Berkovitz and Benham have provisionally asserted their Fifth Amendment rights against self-incrimination.7
The CFTC has since issued a Sunshine Act Notice for a closed CFTC meeting on September 4 to consider enforcement matters.8
To view the full text of The Wall Street Journal article, click on the headline below:
Judge's Order Puts New CFTC Chairman in Unusual Position – The Wall Street Journal
1 See Consent Order, CFTC v. Kraft Foods Grp., Inc., No. 15-CV-2881 (N.D. Ill. Aug. 14, 2019).
2 See Complaint, CFTC v. Kraft Foods Grp., Inc., No. 15-CV-2881 (N.D. Ill. April 1, 2015).
3 See Consent Order, CFTC v. Kraft Foods Grp., Inc., No. 15-CV-2881, at 3, Section I, para. 8 (N.D. Ill. Aug. 14, 2019).
4 See Motion for Contempt, Sanctions, and Other Relief, CFTC v. Kraft Foods Grp., Inc., No. 15-CV-2881 (N.D. Ill. Aug. 16, 2019).
5 See Response Motion (Sealed), CFTC v. Kraft Foods Grp., Inc., No. 15-CV-2881 (N.D. Ill. Aug. 17, 2019).
6 See Minute Entry, CFTC v. Kraft Foods Grp., Inc., No. 15-CV-2881 (N.D. Ill. Aug. 19, 2019).
8 See Sunshine Act Meetings, 84 Fed. Reg. 165, 44603 (Sept. 4, 2019).
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2019. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.