NEW YORK – Commodity trading giant Glencore International A.G., along with its U.S. subsidiaries Glencore Ltd. and Chemoil Corporation, has been slapped with a massive $1.186 billion penalty by the Commodity Futures Trading Commission (CFTC) for manipulative and deceptive conduct spanning over a decade. The CFTC alleges that Glencore engaged in a widespread scheme to manipulate U.S. oil benchmarks and related derivatives from at least 2007 through 2018.
The settlement, announced Wednesday, includes a record-breaking $865.6 million civil monetary penalty and $320.7 million in disgorgement – the highest amounts ever levied by the CFTC in a single case. The CFTC’s order details how Glencore sought to inflate profits by manipulating price assessments for fuel oil products and related swaps in three U.S. geographic markets, impacting interstate commerce.
According to the CFTC, Glencore personnel intentionally manipulated prices on hundreds of days, aiming to create artificial benchmarks used to settle derivatives contracts. This manipulation defrauded counterparties, harmed other market participants, and undermined the integrity of both U.S. and global oil markets. These Platts benchmarks are crucial reference prices for numerous derivatives and impact end-users across the industry.
“When individuals and entities seek to disrupt the reliability of benchmarks, they interfere with the proper functioning of the markets that directly impact consumers,” stated CFTC Chairman Rostin Behnam. “Manipulating oil markets can drive up costs for Americans.”
The investigation also uncovered a pattern of foreign corruption. Glencore allegedly made fraudulent payments – including bribes and kickbacks – to employees and agents of state-owned entities (SOEs) in Brazil, Cameroon, Nigeria, and Venezuela. These payments were intended to secure preferential treatment and access to trades. Glencore also reportedly misappropriated confidential information from SOE employees and agents.
“Today’s enforcement action demonstrates that the CFTC will work with its enforcement partners around the world to ensure that the U.S. markets operate free of manipulation and corruption,” said Acting Director of Enforcement Gretchen Lowe. The case highlights the CFTC’s commitment to pursuing even subtle instances of fraudulent or manipulative behavior in the commodities markets.
Source: CFTC.gov
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