Marubeni America Corporation, a grain dealer and merchant, agreed to pay a fine of US $800,000 to the Commodity Futures Trading Commission to resolve charges that it filed 38 inaccurate reports with the CFTC of its cash positions from July 2010 through August 2013. Under applicable CFTC rules, persons holding large futures and options positions in certain agricultural commodities, including wheat, corn, soybeans and soybean meal, among other commodities, must file certain reports (so-called Form 204 reports) with the CFTC setting forth their cash positions when such futures and options positions are hedging transactions. Marubeni, which claimed to be a hedger, filed incorrect reports of its cash positions in these commodities during the relevant time, said the Commission. After filing erroneous reports, Marubeni—a non-registrant with the CFTC—filed correct reports and "cooperated in the [Division of Enforcement’s] investigation," said the CFTC.
My View: Just two weeks ago, the CFTC Division of Enforcement settled an action with ICE Futures U.S. for the exchange’s alleged failure to file accurate and complete reports relating to trading activity, prices and delivery notices on 325 reporting days from October 2012 to at least May 2014. The amount of the settlement was US $3 million, or approximately US $9,231/reporting day. (Click here for details in the article, “ICE Futures Fined US $3 Million by CFTC for Reporting Errors and Untimely Response to Inquiries” in the March 16 to 20 and 23, 2015 edition of Bridging the Week.) Now, one week later, the Division resolves a matter with Marubeni for its 38 inaccurate reports for US $800,000 or approximately US $21,053/incident—where the Division acknowledges the firm’s cooperation. This disparity in treatment may have a legitimate basis, but superficially it seems incongruous. This is why I have argued previously that the CFTC and its Division of Enforcement should update its now outdated, 2007 “Cooperation Factors in Enforcement Division Sanction Recommendations” (click here to access) to, among other things, provide potential respondents more practical guidance in order to negotiate potential settlements.
