• As part of an effort  to promote transparency and clarity, on September 10, 2020, the Division of Enforcement (“Division”) of the U.S. Commodity Futures Trading Commission (“CFTC” or “Commission”) made public its internal guidance to its staff for evaluating compliance programs in connection with enforcement matters.  This three-page guidance, which will be incorporated into the Division’s Enforcement Manual follows a comprehensive memorandum that was previously announced by the U.S. Department of Justice (“DOJ”) in June 2020 for evaluating corporate compliance programs.  With the heightened scrutiny of compliance programs resulting in harsher penalties and undertakings, companies should conduct a comprehensive review of their respective compliance programs to ensure fulsome compliance with the guidance issued by both agencies before the regulator comes knocking at the door.

  •  On April 1, 2020, the Second Circuit revived a class action alleging that the manipulation of Yen LIBOR and Euroyen TIBOR by many of the world’s leading banks caused the plaintiffs to suffer economic injury.[1]  In Sonterra Capital Master Fund, Limited v. UBS AG,[2] the plaintiffs, a group of investment funds, allege that their trading of Yen foreign exchange forwards, interest rate swaps and interest rate swaptions were adversely affected by the defendants’ conduct. 

  •             On March 24, 2020, the Commodity Futures Trading Commission (“CFTC”) announced that it had unanimously adopted final interpretative guidance (“Final Interpretation”) regarding the term “actual delivery” as it is used in the Commodity Exchange Act (“CEA”) provisions governing retail commodity transactions in the context of virtual currencies.  In light of the path leading to the term “actual delivery” finding its way into the CEA and the CFTC’s prior attempts in apply it to virtual currencies, the Final Interpretation delivers a well-balanced approach to interpreting “actual delivery.”

  • On March 9, 2020, Congressman Paul A. Gosar, R-AZ, introduced H.R. 6154 entitled the “Crypto-Currency Act of 2020.”  The thrust of the proposed legislation is to assign primary regulatory authority to specific, existing Federal agencies over three different kinds of digital assets: “Crypto-Commodities,” “Crypto-Currencies” and “Crypto-Securities.” 

  • With the country seemingly having survived its most recent Presidential impeachment process, what is not commonly appreciated is the outsized role that Presidents involved directly or indirectly in impeachment proceedings have had on commodities regulation. 

  •  On August 16, 2019, the defendants filed an emergency motion seeking to hold the CFTC in civil contempt for violating the terms of the Consent Order by issuing the statements by the Commission and Commissioners Benham and Berkovitz.  These statements have since been pulled down from the CFTC’s website.  Continuing further down this unprecedented path, the Court held a hearing on August 19, 2019, and ordered Chairman Tarbert, Commissioner Benham and Commissioner Berkovitz, to testify at an evidentiary hearing on September 12, 2019.  Stay tuned to further updates on www.commodity-corner.com.

     

  • On August 15, 2019, the CFTC announced that the U.S. District Court for the Northern District of Illinois entered a Consent Order which settles the CFTC’s claims against Kraft Foods Group, Inc. (“Kraft”) and Mondelēz Global LLC (“Mondelēz”) for manipulating and attempting to manipulate the prices of cash wheat and wheat futures, violating speculative position limits, and engaging in noncompetitive trades in CBOT wheat.  The Consent Order imposed a civil monetary penalty in the amount of $16 million against Kraft and Mondelēz, which was described as approximately three times the amount of the alleged gain of the defendants.  This settlement is unusual due to the absence of findings of fact and conclusions of law in the Consent Order, and restrictions to further comment on the parties beyond publicly filed information.    

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