CFTC Charges Absa Bank with Unlawfully Executing Prearranged, Noncompetitive Trades on CBOT

The CFTC issued an Order simultaneously filing and settling charges against Absa Bank, Ltd. for executing prearranged, noncompetitive trades involving corn and soybean futures contracts on the Chicago Board of Trade ("CBOT") with FirstRand Bank, Ltd.

The CFTC Order found that Absa and FirstRand prearranged noncompetitive trades involving CBOT corn and soybean futures contracts on several occasions from June 2009 to August 2011. According to the Order, before these trades were entered on the CBOT, employees for Absa and FirstRand had telephonic conferences with each other during which they agreed upon the contract, quantity, price, direction, and timing of those trades. These prearranged trades negated market risk and price competition and constituted fictitious sales, in violation of the CEA.

Further, by entering into prearranged trades for corn and soybean futures contracts, Absa also engaged in noncompetitive transactions in violation of a CFTC regulation, according to the Order.

See: CFTC Order; CFTC Press Release.