Washington D.C. – The U.S. Commodity Futures Trading Commission (CFTC) settled charges against a Bunge Global Markets trader for manipulating soybean futures contracts in 2009. The CFTC found that the trader, acting on behalf of Bunge, entered orders to buy and sell soybean futures with no intention of having them executed.
The manipulative orders were placed in pre-opening trading sessions on the Globex platform. These orders artificially influenced price reporting, creating prices that were not accurate or “bona fide,” according to the CFTC order. This activity violated the Commodity Exchange Act.
The investigation revealed that in March 2009, two Bunge proprietary traders entered electronic orders for Chicago Board of Trade soybean futures contracts during Globex’s pre-opening session. These orders were designed to gauge market support for specific price levels before the official market open. However, the traders cancelled the orders before they could be executed, demonstrating a lack of intent to actually buy or sell the soybean futures.
Despite being cancelled, these non-bona fide orders distorted the Globex Indicative Opening Price (IOP) for the May 2009 soybean contract. The IOP is a key indicator used by traders and is widely disseminated to the public through financial data publishers. The Bunge traders aimed to gain an unfair advantage by attempting to discern the order positions of other traders.
As a result of the findings, Bunge Global Markets, Inc. was required to pay a $550,000 civil monetary penalty and cease and desist from future violations of the Commodity Exchange Act. The case was handled by CFTC staff members David Terrell, Elizabeth M. Streit, Scott R. Williamson, Rosemary Hollinger, and Richard Wagner.
The settlement was announced on March 22, 2011.
Source: CFTC.gov
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