Commodities Shenanigans Off the Charts

30 09 2012

JPMorgan Chase Fined by CFTC

Fines and settlements are appearing on epidemic proportions in financial services today. Multiple notable cases are reflecting a troubling trend, of firms violating limits put in place to limit risk in the financial system in off the radar financial market places. Earlier this week, news broke that the Goldman Sachs Group Inc. (NYSE: GS) would pay a $12 million settlement for a ‘pay to play’ scheme carried out over a number of years. The Merrill Lynch division of Bank of America (NYSE: BAC) was also recently fined by FINRA for failures to complete required regulatory paperwork and disclosures on time. Now, attention is turning to JPMorgan Chase (NYSE: JPM) as the firm has agreed to pay $600,000 to settle charges it violated cotton futures position limits, the U.S. Commodity Futures Trading Commission. . . . (more)

From Friday: As cotton surged, China trader amassed $510 mln bet

A landmark U.S. fine for excessive speculation in the benchmark cotton futures market has revealed a startling new dimension to last year’s blistering winter price rally: the biggest bull was a Chinese trader with a $510 million punt.

A little-known Shanghai firm called Sheenson Investments Ltd and its founder Weidong Ge, a former trader at China’s vast state-owned agriculture trading company COFCO, have agreed to return $1 million in ill-gotten gains and pay a $500,000 civil penalty for exceeding federal limits on speculative bets in soybean oil and cotton futures, the Commodity Futures Trading Commission said on Tuesday. . . . (more)

Then on Friday, in quick response, a federal judge steps in to quell the disorder AND THROWS OUT THE COMMODITIES TRADING REGS!

“US District Judge Robert Wilkins in Washington on Friday ruled that the 2010 Dodd-Frank Act is unclear as to whether the agency was ordered by Congress to cap the number of contracts a trader can have in oil, natural gas and other commodities without first assessing whether the rule was necessary and appropriate.”




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