Washington, D.C. – Citigroup Inc. and its subsidiary, Citigroup Global Markets Ltd., have been slapped with a $525,000 penalty by the U.S. Commodity Futures Trading Commission (CFTC) for exceeding speculative position limits in wheat futures contracts. The settlement, finalized on September 21, 2012, stems from trading activity on the Chicago Board of Trade (CBOT) in December 2009.
According to the CFTC order, Citigroup, through itself and CGML, repeatedly held aggregate net long positions in wheat contracts that surpassed the CFTC’s established limit of 6,500 contracts for all months combined. The investigation revealed that on multiple occasions in December 2009, the combined holdings of the two entities exceeded this limit. Furthermore, CGML individually exceeded the speculative position limit on at least one day during the same period.
The CFTC charged Citigroup and CGML with violating section 4a(b)(2) of the Commodity Exchange Act and CFTC regulation 150.2. As part of the settlement, the companies are required to pay the $525,000 civil monetary penalty and cease and desist from any future violations of these regulations.
The case was led by CFTC Division of Enforcement staff members Michael R. Berlowitz, Trevor Kokal, David Acevedo, Jeremy Cusimano, Lenel Hickson, Jr., Stephen J. Obie, and Vincent A. McGonagle. The investigation highlights the CFTC’s ongoing commitment to enforcing position limits and ensuring fair and orderly markets.
Citigroup is headquartered in New York, N.Y., while Citigroup Global Markets Ltd. is based in London, England. The settlement underscores the CFTC’s reach across international financial institutions.
Source: CFTC.gov
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