UPDATE: CFTC Levies $12 Million Fine For Early Move To $100 Oil

Sometimes it doesn't pay to be first.

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 January 2, 2008, in violation of the exchange's rules.

The settlement stems from the desire of some commodity traders to grab the historic first contract, or "print," for an oil futures contract above $100 a barrel. The CFTC says one of the company's traders said ConAgra had instructed its floor broker to get the first $100 contract for as long as three months prior to Jan. 2, 2008.

A trader also bragged in an e-mail that, "some people collect art prints, we collect price prints," the CFTC said.

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.

In June 2008, ConAgra 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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