CFTC pulls Kraft wheat statements as commission called to court

Senior staff from the US futures market regulator have been summoned to court in the US and posts relating to a settlement with food giants Kraft and Mondelez have been pulled from its website, in a dramatic twist to a long-running wheat market manipulation case.

The chairman of the Commodity Futures Trading Commission (CFTC), two of its commissioners, and its enforcement director have been ordered to appear before a federal judge after a series of posts appeared online about influencing Chicago wheat futures.

Kraft and Mondelez – the same company at the time of the 2011 fix – were ordered to pay a $16 million fine last week after charges first brought against them in 2015 were wrapped up.

In a series of public statements published on Thursday, the CFTC elaborated on details of the case, explained its settlement with the companies, and made accusations Kraft and Mondelez hurt US farmers through their actions.

In one of the posts, Commissioners Dan M Berkovitz and Rostin Behnam highlighted their dissatisfaction with the secrecy that surrounded the ruling, drawing attention to a section of the judge’s order that barred both parties from discussing the terms of the settlement in public.

“Neither party shall make any public statement about this case other than to refer to the terms of this settlement agreement or public documents filed in this case,” the court’s ruling read.

Berkovitz and Benham said that the court order related to the CFTC and not its staff.

However, all three of the CFTC’s Thursday posts have since been taken down from its website.

“We strongly disagree with the CFTC’s statements, which blatantly violate and misrepresent the terms and spirit of the consent order, and will be seeking immediate relief from the court,” a Mondelez spokesperson told Agricensus on Thursday following the court’s initial ruling.

US civil cases that involve regulators bringing charges of financial manipulation will often be settled with a company accepting a penalty without having to publicly acknowledge its culpability.

CFTC staff are scheduled to appear in court on September 12.