CFTC Fines ConAgra Trade Group $12 Million For Early Move To $100 Oil

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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