Commodity Futures Trading Commission
Office of External Affairs (202) 418-5080
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

Release 4914-04 (CFTC Docket No. 04-13)
For Release: April 15, 2004


WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing and simultaneous settlement of charges against Olam International Limited (Olam), a company incorporated in Singapore, based on illegal wash trading on the Coffee, Sugar & Cocoa Exchange (CSCE), a subsidiary of the New York Board of Trade. The CFTC issued an order imposing a monetary penalty and other sanctions.

The CFTC order, issued on April 6, 2004, finds that on two occasions in June and July 2002, a Singapore-based trader for Olam entered simultaneous or virtually simultaneous orders for equal-and-opposite spread transactions at identical price differentials in cocoa futures contracts. On both occasions, according to the order, Olam’s orders were subsequently directed to the same floor broker in the CSCE cocoa pit, who executed the orders as cross trades. The order finds that Olam, therefore, was on both sides of the transaction and the trades resulted in a virtual financial nullity.

The CFTC order also finds that because the equal-and-opposite spread transactions appeared to be the purchase and sale of CSCE cocoa futures contracts, but did not in fact result in establishing or liquidating a bona fide market position, and were not intended to do so, Olam’s trader in Singapore violated the Commodity Exchange Act’s (CEA) prohibition against illegal wash sales. Further, the order found that the transactions resulted in the reporting of non-bona fide prices, in addition to being illegal noncompetitive trades. Because Olam’s trader was an employee of Olam and acting as its agent, the order found Olam vicariously liable for the violations.

The order directs Olam to cease and desist from further violations of the CEA, to pay a $20,000 civil penalty, and to comply with specified undertakings. In consenting to the entry of the CFTC’s order, Olam neither admitted nor denied the findings made in the order. A copy of the CFTC order may be found at

The following Division of Enforcement staff were responsible for this case: Grant Collins, John Dunfee, Paul Hayeck, and Joan Manley.

# # #

Media Contacts
Alan Sobba (202) 418-5080
Dennis Holden (202) 418-5088
Office of External Affairs

Staff Contacts
Joan Manley
Deputy Director
CFTC Division of Enforcement
(202) 418-5356

Related Document