Two Companies Ask Federal Judge to Sanction CFTC for Violating Settlement Agreement
Two companies, that had agreed to a settlement in a wheat futures price manipulation case, filed a motion for contempt against the CFTC. The companies argued that the agency violated the terms of the settlement which required that both the companies and the CFTC not make "any public statement" about the matter.
As previously covered, the Defendants, Kraft Foods Group, Inc. and Mondelēz Global LLC, and the CFTC agreed not to make "any public statement" about a case that resulted in a $16 million settlement. However, after the case was settled, the CFTC published a press release and several statements regarding the settlement on its website, including:
the CFTC press release titled "Penalty Valued at Three Times the Alleged Gain," which included a statement from Chair Heath P. Tarbert concerning the companies' alleged conduct; and
the "Statement of Commission" and "Statement of Commissioners Berkovitz and Behnam," which discussed the case.
In the Motion for Contempt, Sanctions and Other Relief, the companies allege that the three statements indicate that the CFTC and its Commissioners "never intended to comply with the agreement they negotiated" (i.e., the "gag order"). The companies urged the Judge to (i) find the CFTC and its Commissioners in contempt for violating terms of the settlement and (ii) order the CFTC and its Commissioners to take remedial action and pay monetary sanctions.
The CFTC filed a response, asserting that it did not violate the terms of the agreement. Specifically, the CFTC stated that the agency and its Commissioners are "legally distinct," that while the Court's gag order binds the Commission, it does not apply to the views expressed by individual Commissioners, and that the Commission is prohibited from restricting any individual Commissioner's statements.
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