HOUSTON, TX – The Commodity Futures Trading Commission (CFTC) has levied a massive $95 million penalty against Vitol Inc., a Houston-based energy and commodities trading firm, for manipulative and deceptive conduct spanning over fifteen years. The CFTC order, issued December 3, 2020, details a pattern of foreign corruption and market manipulation impacting U.S. and global oil markets from 2005 to early 2020.
The charges center around Vitol’s alleged bribery and kickback schemes targeting employees and agents of state-owned entities (SOEs) in Brazil, Ecuador, and Mexico. The firm is accused of funneling corrupt payments through offshore accounts and shell companies, disguising them as legitimate expenses like “market intelligence” or “sell support.” These payments were reportedly made to secure preferential treatment and access to trades, giving Vitol an unfair competitive advantage.
According to the CFTC, Vitol also obtained confidential information – including specific bid prices dubbed the “gold number” – from a Brazilian SOE employee in exchange for corrupt payments. This inside information was then used to gain an advantage in trading physical oil and derivatives.
The CFTC’s investigation revealed that in 2014 and 2015, Vitol attempted to manipulate two S&P Global Platts physical oil benchmarks to benefit its trading positions. This manipulation, the CFTC argues, distorted numerous futures, swaps, and other derivative trades that reference these benchmarks.
This case marks the CFTC’s first enforcement action involving foreign corruption, brought in coordination with its Corruption Task Force. CFTC Chairman Heath P. Tarbert stated the action demonstrates the agency’s commitment to pursuing fraud linked to foreign corruption impacting U.S. markets.
In a parallel action, the Department of Justice (DOJ) entered into a Deferred Prosecution Agreement (DPA) with Vitol, deferring criminal prosecution on charges of conspiracy to violate the Foreign Corrupt Practices Act. Under the DPA, Vitol agreed to pay a criminal fine, a portion of which will be offset against the CFTC penalty.
The CFTC order requires Vitol to pay more than $95 million in civil monetary penalties and disgorgement, effectively ending the investigation into the firm’s decade-and-a-half long pattern of misconduct.
Source: CFTC.gov
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