CFTC Fines Foreign Firm for Unlawfully Executing Prearranged, Noncompetitive Trades on the CBOT

The CFTC issued an order simultaneously filing and settling charges against financial services company FirstRand Bank, Ltd. ("FirstRand") for executing unlawful prearranged and noncompetitive trades on the Chicago Board of Trade ("CBOT").

The order states that, from June 2009 to August 2011, FirstRand and another non-U.S. firm colluded to engage in noncompetitive trades involving corn and soybean futures contracts. Before these trades were entered on CBOT, the two firms called one another to confer upon the contract, quantity, price, direction and timing of the trades. According to the CFTC, the prearranged trades negated market risk and price competition and constituted fictitious sales, in violation of CEA Section 4c(a)(1) ("Prohibited Transactions") and CFTC Rule 1.38(a) ("Execution of Transactions").

In addition to a $150,000 fine, the CFTC required FirstRand to comply with undertakings to prevent future violations.

See: CFTC Order.