Glencore Ltd, Position Limit Violations, Connecticut 2018

WASHINGTON D.C. – Commodity giant Glencore Ltd. and its subsidiary, Glencore Agriculture B.V., have been slapped with a $2 million penalty by the Commodity Futures Trading Commission (CFTC) for multiple violations of trading regulations, according to an order filed Monday.

The CFTC found that between January 2013 and November 2015, Glencore B.V. and Glencore Ltd. exceeded established speculative position limits on ICE Futures Cotton No. 2 contracts. Specifically, their combined positions surpassed the 5,000 contract limit on numerous days in May and June of 2013 and 2014. The companies operated under a centralized management structure with a single “Head of Cotton” overseeing all global cotton operations, effectively consolidating their trading activity.

The investigation also revealed that Glencore B.V. and Glencore Ltd. engaged in 24 illegal “wash trade” transactions – Exchange of Futures for Physicals (EFPs) – between their own accounts. These EFPs were executed despite the accounts not being independently controlled, a requirement to avoid being classified as manipulative. Both accounts ultimately answered to the same trading manager, the Head of Cotton.

Further compounding the violations, the CFTC determined that Glencore B.V. submitted inaccurate information on Form 304 filings, failing to accurately report short cash sales commitments on at least two occasions in 2013 and 2014.

The CFTC order mandates that Glencore B.V. and Glencore Ltd. jointly and severally pay the $2 million civil monetary penalty and cease all further violations of the Commodity Exchange Act (CEA) and related CFTC Regulations. The companies did not admit or deny the findings but agreed to the settlement.

The case highlights the CFTC’s ongoing efforts to police position limits and prevent manipulative trading practices in commodity markets, ensuring fair and transparent trading for all participants.

Source: CFTC.gov

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