CFTC Fines Firms for Violating Cocoa Position Limits and Unlawfully Executing Noncompetitive Trades

The CFTC fined and simultaneously settled charges against two related firms for failing to disclose that their cocoa futures trades were not independently controlled.

The CFTC found that, between February 2011 and January 2013, the cocoa futures traders at the two firms had access to each other's position information and regularly discussed the cocoa markets. According to the CFTC, Olam Americas, Inc.'s cocoa traders placed orders to buy and sell cocoa futures for Olam International, Ltd.'s account, and an Olam Americas, Inc.'s cocoa trader supervised certain of Olam International, Ltd.'s cocoa futures trading activities between January 2012 and May 2012.

Additionally, the Order found that the accounts controlled by the respondents should have been aggregated in compliance with the applicable position limits. When aggregated, the cocoa futures positions of Olam International, Ltd. and Olam Americas, Inc. exceeded the 1,000-contract spot-month position limit for cocoa futures contracts traded on ICE Futures U.S. Inc. This occurred on six trading days between February 2011 and January 2013, in violation of the CEA.

See: CFTC Order; CFTC Press Release.