PASCO, WA – Cody Easterday, co-owner and former president of Easterday Ranches, Inc., is facing civil charges of fraud, false statements, and violating exchange position limits, the Commodity Futures Trading Commission (CFTC) announced on March 31, 2021. The complaint, filed in the United States District Court for the Eastern District of Washington, alleges a decade-long scheme to cover up over $200 million in losses from cattle futures trading.
According to the CFTC, Easterday defrauded a South Dakota-based beef producer by submitting false invoices and reimbursement requests for more than 200,000 head of cattle that Easterday Ranches never purchased or raised. Between October 2016 and November 2020, the scheme allegedly netted Easterday Ranches over $233 million in fraudulent payments.
The complaint further alleges that Easterday deliberately misled the Chicago Mercantile Exchange (CME) in applications for hedge exemptions. By falsely reporting cattle inventory, purchases, and sales in 2017 and 2018, Easterday sought to bypass CME position limits in live and feeder cattle futures markets. These false statements invalidated the exemptions, resulting in multiple violations of exchange-set position limits.
The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, and permanent trading and registration bans against Cody Easterday. They are also requesting a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
“The Commission will vigorously prosecute fraud committed in connection with derivatives trading, including making false statements to exchanges to exceed the applicable limits on their positions,” stated Acting Director of Enforcement Vincent McGonagle.
The case is being pursued by CFTC staff members Ben Sedrish, Ashley J. Burden, Joseph Patrick, Yusuf Capar, Allison V. Passman, Scott Williamson, and Robert Howell.
Source: CFTC.gov
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