US Markets

Kraft, Mondelez to pay $16 million in wheat price manipulation case

Credit: REUTERS/Michael Buholzer

The U.S. Commodity Futures Trading Commission (CFTC) said on Thursday Kraft Heinz Co and Mondelez International Inc will pay $16 million in penalty regarding a wheat manipulation case that dates back to 2015.

Aug 15 (Reuters) - The U.S. Commodity Futures Trading Commission (CFTC) said on Thursday Kraft Heinz Co KHC.O and Mondelez International Inc MDLZ.O will pay $16 million in penalty regarding a wheat manipulation case that dates back to 2015.

The CFTC said Kraft and Mondelez came up with a strategy to purchase and stand for delivery on more than 3,000 futures contracts, priced at about $90 million, to send the market a false signal that the companies had demand for wheat.

The lawsuit was filed by wheat futures and options traders who accused Kraft and Mondelez of illegally manipulating the grain's price at their expense.

The complaint alleged the companies had no intention of sourcing wheat from the futures market and the $90 million of wheat futures at issue exceeded their actual sourcing needs.

The penalty is about three times the companies' alleged gain, the CFTC said in a statement. (http://bit.ly/2OX1iyo)

(Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur)

((Nivedita.Balu@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 4822/ Twitter: https://twitter.com/niveditabalu;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Commodities

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More