Washington, D.C. – Agricultural cooperative CHS, Inc. has been slapped with a $500,000 penalty by the Commodity Futures Trading Commission (CFTC) for repeated failures to accurately report data on its corn and soybean transactions, according to an order filed Monday.
The CFTC alleges that Minnesota-based CHS violated a 2016 cease and desist order, which itself stemmed from a thirteen-year history of filing incorrect CFTC Form 204 reports. These reports detail the composition of CHS’s fixed price cash corn and soybean purchases and sales.
While the penalty is significant, the CFTC acknowledged that CHS’s proactive self-reporting and cooperation substantially reduced the potential fine. According to CFTC Director of Enforcement James McDonald, the agency likely wouldn’t have detected the errors without CHS bringing them to light.
CHS initially discovered the reporting errors during an internal audit following the 2016 order, which had already resulted in a $1 million penalty. The audit was part of an effort to replace the company’s enterprise software and automate the Form 204 reporting process. After identifying the new errors in May 2018, CHS immediately self-reported the issue to the CFTC and continued to provide updates as its investigation progressed.
The company performed an analysis to determine if the inaccurate reporting had led to any violations of position limits, and fully cooperated with the CFTC’s investigation. The CFTC noted that CHS accepted responsibility for the failures and was forthcoming throughout the process.
The CFTC previously issued guidance in 2013 emphasizing the importance of accurate Form 204 reporting. The investigation was led by Kelly Beck, Janet Briner, Linda Chalet, James H. Holl III, Alison B. Wilson, and Rick Glaser of the CFTC’s Division of Enforcement, with assistance from the Division of Market Oversight.
Source: CFTC.gov
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