Federal regulators have accused two major U.S. food companies of manipulating the wheat market.
The Commodity Futures Trading Commission announced Wednesday the filing of a civil enforcement complaint against Kraft and Mondelez.
The Associated Press outlines the CFTC’s accusations against the two companies:
- Using “manipulative trading strategies” in December 2011 to artificially lower wheat prices.
- Violating rules limiting the volume of futures contracts in wheat that financial investors can trade on exchanges.
- Making trades in wheat futures that violated rules of competition from 2003 through January 2014.
The CFTC’s director of enforcement, Aitan Goelman, said in a press release:
This case goes to the core of the CFTC’s mission: protecting market participants and the public from manipulation and abusive practices that undermine the integrity of the derivatives markets.
A market participant who is not happy with cash prices available to it may not resort to manipulative trading strategies in an attempt to artificially lower that price.”
Kraft and Mondelez used to be one company, Kraft Foods, until the entities were split into Kraft Foods Group and Mondelez in 2012. The new Kraft company retained brands like Velveeta, Jell-O and Oscar Mayer, and Mondelez has brands like Cadbury, Chips Ahoy and Oreo.
Most of the alleged violations occurred while Kraft and Mondelez were still one company.
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