WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) settled charges against CNCGC Hong Kong Ltd. (CNCGC HK) on January 17, 2017, for failing to comply with reporting requirements related to cotton futures positions. The Hong Kong-based investment and trading company was cited for failing to file required CFTC Form 304 Cotton On-Call Reports and for submitting late reports on two occasions.
The CFTC Order mandates that CNCGC HK pay a $150,000 civil monetary penalty and prohibits the firm from future violations of CFTC Regulation 19.02. The violations occurred between March 2014 and August 2015, with CNCGC HK failing to file weekly Form 304 reports on 53 separate occasions when the company held or controlled at least 100 cotton futures contracts. Late filings were submitted in October 2015 and January 2016.
CFTC regulations require cotton merchants or dealers holding 100 or more cotton futures positions to file weekly Form 304 reports detailing their call cotton purchases and sales. Call cotton is defined as “spot cotton bought or sold, or contracted for purchase or sale, at a price to be fixed later based upon a specific future.” The CFTC utilizes this data for its weekly Cotton On-Call Reports, published as part of its Market Reports.
The CFTC had previously issued a Market Advisory reminding cotton market participants of their obligation to comply with reporting requirements. This action marks the fourth enforcement case brought by the CFTC concerning Call Cotton Reporting Violations since the advisory was released. Previous actions include penalties levied against Agrocorp International Pte Ltd. ($150,000 in July 2016), Libero Commodities SA ($480,000 in May 2015), and Multigrain SA and Agricola Xingu SA (jointly $500,000 in January 2014).
The CFTC noted that CNCGC HK fully cooperated with the investigation conducted by the Division of Enforcement and has since implemented a compliance program to ensure timely reporting of cotton transactions. The case was led by Diane M. Romaniuk, Ava Gould, Mary Elizabeth Spear, Scott Williamson, and Rosemary Hollinger of the CFTC’s Division of Enforcement, with assistance from Kelly Beck and Janet Briner of the Division of Market Oversight and Andrew Ba.
Source: CFTC.gov
Related Federal Cases
- Teresita B. Mutton, Money Laundering, District of Columbia 2023 · District of Columbia
- Gary Ian Peng, Money Laundering, District of Columbia 2023 · District of Columbia
- Sherrell Washington, Distribution of Oxycodone, District of Columbia 2016 · District of Columbia
- Jill Murray, Wire Fraud, District of Columbia 2017 · District of Columbia
- Michelle Cho, Wire Fraud Conspiracy, District of Columbia 2023 · District of Columbia
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News