Washington, D.C. — The Commodity Futures Trading Commission today filed and settled charges against Tyson Foods, Inc., for exceeding the CFTC’s position limits for soybean meal futures contracts traded on the Chicago Board of Trade (CBOT) and for failing to comply with reporting and recordkeeping obligations regarding its cash positions in grains. The order requires Tyson to pay a $1.5 million civil monetary penalty and to cease and desist from violating the Commodity Exchange Act and CFTC regulations as charged.

Case Background

The order finds that on more than 590 dates over a five-year period between January 2016 and January 2021, Tyson held positions in CBOT soybean meal futures in excess of then-applicable federal position limits. Tyson did so without the benefit of a hedge exemption for soybean meal. On those dates, Tyson’s positions were, on average, 2,473 contracts—or 38%—over the then-applicable 6,500-contract limit, and its net long futures positions...

Washington, D.C. — The Commodity Futures Trading Commission today announced that the U.S. District Court for the Southern District of New York entered a consent order against five companies charged with operating the BitMEX cryptocurrency derivatives trading platform. The companies are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited.

The order requires the BitMEX entities to pay a $100 million civil monetary penalty, and provides that up to $50 million of the penalty may be offset by payments the BitMEX entities make or are credited pursuant to a Consent to Assessment of Civil Monetary Penalty entered by the Financial Crimes Enforcement Network (FinCEN). [See FinCEN Press Release]. The order also prohibits BitMEX from further violations of the Commodity Exchange Act (CEA) and CFTC’s regulations as charged.

“This case reinforces the expectation that the digital...

Washington, D.C. — The Commodity Futures Trading Commission today announced that Judge Sim Lake, of the U.S. District Court for the Southern District of Texas, entered a consent order against Mayco Alexis Maldonado Garcia, and a separate consent order against Cesar Castaneda and Joel Castaneda Garcia.

The orders impose a permanent injunction and permanently ban the defendants from registering with the CFTC and from trading commodity interests. The orders also require the defendants to pay $989,550 in restitution, Mayco Alexis Maldonado Garcia to pay a civil monetary penalty of $400,000, and Cesar Castaneda and Joel Castaneda Garcia to each pay a civil monetary penalty of $180,000.   

The consent order resolves the CFTC’s case against these defendants, which was filed in the Southern District of Texas on September 14, 2020. [See CFTC Press Release No. 8241-20] The CFTC’s litigation continues against a fourth defendant, Rodrigo Jose Castro Molina. ...

Remarks as Prepared for Delivery at the ISDA Derivatives Trading Forum

Overview

The Greek philosopher Heraclitus is credited with the oft-cited saying that change is the only constant in life.[1]  This idea seems particularly pertinent to our financial markets—which probably explains why I have been asked to speak today about how regulators adapt to changing market structure.  Before I begin, though, please allow me to remind you that the views I express today in these remarks are my own and do not represent the views of the Commodity Futures Trading Commission (CFTC or Commission) or my fellow Commissioners.

Put quite bluntly, regulators struggle with adaptation.  It is a not a new struggle, nor is the stress it imposes necessarily negative.  Rather, it is the natural challenge of our job to ensure that regulations are keeping pace in such a way to enable the benefits of innovation and increased efficiency for the marketplace. ...

Washington, D.C. — The Commodity Futures Trading Commission’s Market Participants Division today issued an interpretation concerning capital and financial reporting obligations for swap dealers (SDs) and major swap participants (MSPs) that compute minimum capital requirements based on the respective firm’s tangible net worth.

The interpretation clarifies that a non-bank SD that utilizes the tangible net worth method of calculating net capital may satisfy the requisite eligibility tests at either the non-bank SD entity level or at the level of the entity’s ultimate consolidated parent. 

The interpretation also clarifies that certain non-bank SDs and non-bank MSPs that maintain books and records in accordance international financial reporting standards (IFRS) in lieu of U.S. generally accepted accounting principles (U.S. GAAP), and file financial reports with the CFTC in accordance with IFRS in lieu of U.S. GAAP, may also use IFRS in lieu of U.S. GAAP to...

Washington, D.C. — The Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against Amaggi Exportação e Importação Ltda. (Amaggi), a corporation based in Brazil, for failing to file timely—and accurate—CFTC Form 204 reports regarding their fixed price soybean positions. The order requires Amaggi to pay a $175,000 civil monetary penalty and to cease and desist from violating CFTC Regulation 19.01.

The order finds that, on approximately 13 monthly reporting dates between January 2018 and January 2021, Amaggi held reportable positions in Form 204 commodities and failed to file the required Form 204 reports showing the quantities of the fixed purchase and sale open cash positions of such commodities it hedged, despite repeated notifications by CFTC staff. In addition, the order finds that, even after filing the missing Form 204 reports, eight of the late-filed reports were inaccurate.

Consistent with this filing, the...

Washington, D.C. — The Commodity Futures Trading Commission today announced that it has issued an order filing and settling charges against former introducing broker Classic Energy LLC and its owner, Mathew D. Webb of Houston, Texas for participating in a scheme to misappropriate the confidential block trade order information of Classic’s brokerage customers and facilitate fictitious trades. Webb and Classic are also charged with a scheme to defraud these brokerage customers by paying kickbacks to certain individual traders of these customers, as well as supervision violations and making false statements to ICE Futures US (ICE).

Webb and Classic admit the facts of their misconduct and acknowledge that their conduct violated the Commodity Exchange Act (CEA) and CFTC regulations.

This is the CFTC’s second enforcement against Webb and Classic. On September 30, 2019, the CFTC charged Webb and Classic with misappropriation of information, supervision, and...