On Nov. 6, 2017, the CFTC announced the filing and simultaneous settlement of charges against Cargill Inc. for providing mid-market marks that concealed from counterparties and its swap data repository its full mark-up on certain swaps, in violation of the Commodity Exchange Act and commission regulations.

Case Status
Settled
Practice Areas
CFTC Whistleblower
Court
Commodity Futures Trading Commission
Case Number
CFTC Docket No. 18-03
Defendant(S)
Cargill Inc.
File Date

Hagens Berman and its attorneys Steve Berman, managing partner, and Shayne Stevenson, partner managing the whistleblower practice, represent the CFTC whistleblower behind the government’s investigation of unlawful practices at Cargill Inc. and its business, Cargill Risk Management, that culminated in a $10 million settlement with the CFTC announced Nov. 6, 2017.

The CFTC found that Cargill, a global agricultural, commodity and financial services business headquartered in Minnesota, had provided counterparties and regulators with inaccurate mid-market marks that concealed its full mark-up on certain swaps, in violation of the Commodity Exchange Act and CFTC Regulations.

"In particular, Cargill was reluctant to disclose its mark up on certain complex swaps because of a concern that such transparency might ultimately reduce its revenue. As a result of this concern, Cargill chose to provide a mark that was based on a termination or 'unwind' value that included a portion of Cargill’s estimated revenue during the first sixty calendar days of the swap, and also credited the counterparty with a portion of its estimated revenue if the counterparty terminated the swap during that same period," the order settling charges against Cargill reads.

The CFTC went on to say that Cargill's methods effectively concealed "from the counterparty the full revenue that Cargill expected to make from the swap transaction. Cargill took this approach despite concerns that its contemplated mid-market mark methodology did not meet the requirements of the Commission’s regulations concerning mid-market marks, either pre-trade or during the first sixty calendar days of the swap. As a result of this conduct, Cargill violated the mid-market mark disclosure requirements and swap reporting rules, and failed to supervise its employees."

The CFTC's order also highlighted Cargill's failure to supervise employees in relation to certain swaps executed based on prices derived by Cargill's ProPricing program. Cargill employees provided reports to third-party marketers on the ProPricing accounts that failed to reveal that the ProPricing accounts on which the swap is priced were over- or under-hedged.

Hagens Berman's whistleblower practice provides information to whistleblowers regarding the CFTC's whistleblower programprotections and rewards. The firm's whistleblower attorneys have represented several successful CFTC and SEC whistleblowers and have developed a strong understanding of how to best develop and present CFTC and SEC whistleblower complaints.

ABOUT THE CFTC WHISTLEBLOWER PROGRAM

Hagens Berman is one of a handful of the leading law firms representing successful whistleblowers under the CFTC whistleblower program. In this highly technical field, Hagens Berman has the expertise and experience to present a CFTC whistleblower complaint to the Commodities and Futures Trading Commission under its Dodd-Frank CFTC Whistleblower Program. Our firm has handled several successful and highly publicized cases in this specialty area of practice. The CFTC is the federal agency that regulates the trading of futures and options contracts, including swaps and varied derivative products. Such fraud policed by the CFTC includes commodities and futures market manipulation; false and misleading statements; Ponzi, pyramid or other fraudulent schemes; other fraud schemes in connection with commodities, futures and swaps and certain complex derivative instruments. Hagens Berman continues to represent clients from around the world in CFTC whistleblower cases actively investigated by the CFTC Enforcement Division. 

CONFIDENTIAL CONSULTS FOR WHISTLEBLOWERS

Whistleblower cases are kept under strictly enforced confidentiality by the government or the courts during the period of investigation, and for the SEC/CFTC/IRS programs, in perpetuity. Likewise, whistleblower attorneys at Hagens Berman will handle its investigation and any eventual lawsuit or agency complaint with the highest confidentiality to protect your anonymity. We work to protect your anonymity, confidentiality, and job security during the entirety of our representation. Whistleblower laws protect employees from retaliation and Hagens Berman helps whistleblowers address retaliation and potential retaliation. To understand your rights and the legal protections provided by several whistleblower programs, contact us for a confidential consult.

TOP WHISTLEBLOWER LAW FIRM

Hagens Berman’s team of expert whistleblower attorneys, led by managing partner, Steve Berman and head of whistleblower practice, Shayne Stevenson, has the track record, reputation, and knowledge to advocate for whistleblower clients in ways others do not. Our whistleblower practice is among a handful of the most successful and respected in the U.S. Unlike smaller, less experienced whistleblower law firms, Hagens Berman also has more than 80 attorneys in cities worldwide litigating complex corporate fraud every day, giving our clients the resources and expertise necessary to take on a broad range of whistleblower cases.

Case Timeline
Title
CFTC Orders Cargill Inc. to Pay $10M Civil Monetary Penalty
Description

On Nov. 6, 2017, the CFTC announced the filing and simultaneous settlement of charges against Cargill Inc. for providing mid-market marks that concealed from counterparties and its swap data repository its full mark-up on certain swaps, in violation of the Commodity Exchange Act and commission regulations.

Hagens Berman and its attorneys Steve Berman, managing partner, and Shayne Stevenson, partner managing the whistleblower practice, represent the CFTC whistleblower behind the government’s investigation. CFTC press release »

Date

CASE TIMELINE

CFTC Orders Cargill Inc. to Pay $10M Civil Monetary Penalty

On Nov. 6, 2017, the CFTC announced the filing and simultaneous settlement of charges against Cargill Inc. for providing mid-market marks that concealed from counterparties and its swap data repository its full mark-up on certain swaps, in violation of the Commodity Exchange Act and commission regulations.

Hagens Berman and its attorneys Steve Berman, managing partner, and Shayne Stevenson, partner managing the whistleblower practice, represent the CFTC whistleblower behind the government’s investigation. CFTC press release »

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