CFTC Fines ConAgra Trade Group $12 Million For Early Move To $100 Oil
August 16 2010 - 6:26PM
Dow Jones News
The Commodity Futures Trading Commission on Monday levied a $12
million fine on ConAgra Trade Group, the former commodity-trading
arm of ConAgra Foods Inc. (CAG), for a trader's move to purchase
the first-ever contract for $100-a-barrel oil in 2008.
The CFTC said it filed and simultaneously settled charges
against the group for causing a "non-bona fide price" to be
reported to the New York Mercantile Exchange on Jan. 2, 2008, in
violation of the exchange's rules.
Shortly after noon on Jan. 2, a floor broker acting on ConAgra's
behalf accepted an offer for the February crude futures contract at
$100, which prompted a complaint from another broker on the floor
of the exchange that he was holding an offer to sell crude futures
at a better price.
The CFTC says ConAgra had instructed its floor broker to attempt
to be the first to purchase a $100 a barrel contract, according to
another ConAgra trader.
In June 2008, ConAgra had completed the sale of the trading and
merchandising operations conducted by the ConAgra Trade Group to a
group of investors led by hedge fund Ospraie Management for $2.8
billion. The trading group now operates as The Gavilon Group.
A Gavilon spokesman said, "We are pleased that this matter has
been resolved and believe that this agreement is in the best
interest of our customers and suppliers."
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155;
jerry.dicolo@dowjones.com
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