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.
“A two-letter conjunction and a two-word phrase decide this case. At stake are hundreds of millions of dollars.”
On May 8, 2019, the Division of Enforcement made public its first-ever Enforcement Manual. The Enforcement Manual addresses the various stages of the Division’s investigations and litigations. While much of the Enforcement Manual is rooted from the Commission’s Regulations and still leaves much discretion to Division Staff, its deputies and director, it does shed some light into the Division’s processes and policies. Although the Enforcement Manual does not create any private rights, is not enforceable in court, and is not binding law, it will likely be a useful reference tool for engaging in dialogue with Division Staff during various points of the Division’s investigations and litigations.
On April 18, 2019, Eric Powers of Kern County, California, entered into a consent order with the Financial Crimes Enforcement Network for acting as an unregistered money transmitter. FinCEN determined that Powers’ purchase and sale of Bitcoin for U.S. Dollars in over 1,700 “peer-to-peer” transactions from 2012 through 2014 made him an “exchanger” of convertible virtual currency.
On March 13, 2019, the Senate Agriculture Committee held its hearing on the nomination of Dr. Heath Tarbert to replace current CFTC Chairman J. Christopher Giancarlo, whose term is set to expire in mid-April. Tarbert currently serves as the Assistant Secretary for Institutional Markets at the Treasury Department. With indications of bipartisan support for his nomination, Tarbert is widely expected to be confirmed and to arrive at the CFTC this summer. The hearing provided insights into what is in store for the CFTC’s regulatory and enforcement regimes under Tarbert’s watch.
UPDATE: On July 5,2019, the Senate voted overwhelmingly to confirm Dr. Tarbert to be the CFTC's next chairman. Dr. Tarbert is expected to be sworn in as the CFTC's chairman in mid-July.
CFTC Director of Enforcement James McDonald offered remarks detailing the agency’s intention to investigate “violations of the CEA carried out through foreign corrupt practices.” On the same day, the CFTC issued an Enforcement Advisory related to “Self Reporting and Cooperation for CEA Violations Involving Foreign Corrupt Practices.”
The European Union (“EU”) on Monday, February 25, 2019, agreed to give providers of “critical benchmarks” (e.g., Euribor or EONIA) an additional two years (to December 31, 2021) to comply with the EU’s new benchmark regulation requirements.
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