U.S. CFTC awards nearly US$2.5 million to Cargill whistleblower

Chicago | Reuters — The U.S. Commodity Futures Trading Commission has awarded about US$2.5 million to a whistleblower in a 2017 case against global grain trader Cargill over alleged violations in how it handled trades, the agency said Tuesday.

The award, while significant in size, was reduced “because of the whistleblower’s delay in reporting” the misconduct, the agency said in a statement.

The agency fined Cargill US$10 million in 2017 for providing inaccurate information on swaps to protect its revenue, and for failing to supervise the company’s swap dealers.

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In a statement to Reuters, Cargill said it and CFTC resolved the matter in November 2017, and Cargill neither admitted nor denied the findings.

The CFTC said that beginning in 2013, Cargill did not comply with regulations on thousands of complex swaps that affected hundreds of counterparties. Swaps are utilized in varying financial markets by companies to manage risk outside of futures and options markets.

Cargill, one of the largest agriculture commodities traders in the world, provided inaccurate marks that concealed as much as 90 per cent of its mark-up, according to the CFTC.

“We reached an agreement with the CFTC to change customer reporting for products provided by its swap dealer, Cargill Risk Management,” the company said in a statement. “We also immediately took actions to enhance our internal controls and employee training programs.”

The company declined to comment further.

— Reporting for Reuters by P.J. Huffstutter in Chicago.

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