Statement of Commissioner Kristin Johnson Regarding the CFTC’s Order Imposing $1.186 billion in Penalties and Required Disgorgement Against Glencore for Manipulation of Oil Benchmarks
May 25, 2022
The Commodity Futures Trading Commission (CFTC) issued an Order filing and settling claims against Glencore International AG, Glencore Ltd., and Chemoil Corporation (Glencore) for violations of the anti-manipulation provisions of the Commodity Exchange Act (Act). The order requires Glencore to pay $1.186 billion, which includes a civil monetary penalty of $865,630,784 and disgorgement amount of $320,715,066, each being the highest paid in any CFTC case.
Glencore is one of the world’s largest energy and commodities trading firms. Continuing for more than a decade, Glencore’s misconduct included attempts to manipulate and manipulation of several U.S. based S&P Global Platts (Platts) benchmark prices for physical oil and related derivatives. In addition, Glencore engaged in corrupt practices, bribing numerous individuals who worked for state-owned entities in various countries, including Brazil, Cameroon, Nigeria, and Venezuela as part of its scheme to defraud the market.
The Act broadly prohibits fraudulent conduct and manipulation and attempted manipulation of the price of any commodity in interstate commerce, regulated futures, and swaps. Our markets rely on the integrity of benchmarks, such as the Platts physical oil benchmarks, because these benchmarks affect the price of fuel and related products and provide the reference price for the settlement of many futures and swaps.
Glencore’s manipulative conduct defrauded its counterparties and undermined market integrity. The company’s actions stymied price discovery. Inaccurate prices hurt market participants, end-users, and many businesses and consumers who, as a result, incur the cost for such misconduct by paying higher prices at the grocery store and at the pump. The price of oil acutely affects the cost of growing food as well as manufacturing and distribution of goods and services.
I recognize the efforts of the Division of Enforcement and its staff, including Gates S. Hurand, Peter Janowski, Jacob Mermelstein, David W. MacGregor, R. Stephen Painter, Jr., Michael Cazakoff, Matthew Edelstein, Patrick Marquardt, Jordon Grimm, Lenel Hickson, Jr., and Manal M. Sultan. Additional staff members in the Division of Enforcement who provided assistance include Allison Passman, Doug Snodgrass, Joseph Konizeski, Stephanie Reinhardt, and former Division staff member Brigitte Weyls.
Further, I recognize the Division of Enforcement’s effective work in parallel with the Department of Justice Fraud Section and thank the Comissão de Valores Mobiliários (the Brazilian Securities Market Commission), the Bermuda Monetary Authority, the Hong Kong Securities and Futures Commission, the Luxembourg Commission de Surveillance du Secteur Financier, the Mexico Comisión Nacional Bancaria y de Valores, and the Banco Central del Uruguay for their assistance.