Trafigura agrees to pay $55m to settle CFTC charges

The agreement neither admitted nor denied the CFTC’s findings.

Trafigura Trading LLC has settled with the US Commodity Futures Trading Commission (CFTC), agreeing to pay $55m to resolve allegations stemming from past conduct.

The settlement, which Trafigura neither admits nor denies, addresses several allegations raised by the CFTC.

The CFTC earlier issued an order settling charges against Trafigur for violations of the Commodity Exchange Act (CEA) and related regulations. The violations identified in the order against Trafigura include trading gasoline from 2014 to 2019 whilst possessing material nonpublic information that was misappropriated from a Mexican trading entity. 

CFTC also said Trafigura manipulated a fuel oil benchmark in February 2017 to advantage its futures and swaps positions, impacting derivatives traded on US registered entities.

Moreover, between 2017 and 2020, Trafigura required employees to sign agreements with non-disclosure provisions prohibiting communication with CFTC enforcement staff, thereby impeding voluntary cooperation during investigations.

Following the investigation, Trafigura has bolstered its compliance framework with enhanced policies and procedures to ensure market integrity, including strengthening controls over market communications, increasing investment in employee training and compliance testing, and improving ongoing monitoring and control testing protocols.

Additionally, Trafigura has agreed to revise the non-disclosure provisions in its employment, termination, and severance agreements. The updated language now explicitly states that these provisions do not restrict or hinder communications with governmental authorities regarding potential violations of the law.