(Finance) – The U.S. Commodity Futures Trading Commission has issued an order to resolve the charges against Vitola commodity trading giant, for having exceeded position limits of the CFTC on aggregate positions on multiple exchanges in contracts that reference futures on crude oil traded on the New York Mercantile Exchange (NYMEX) and for exceeding CFTC position limits in futures contracts on livestock traded on the Chicago Mercantile Exchange (CME).
The order requires Vitol to pay a civil monetary penalty of 500,000 dollars.
This – we read in a note – marks the first use by the CFTC of its authority to enforce position limits on aggregate positions held across multiple exchanges. In addition to imposing a fine, the order requires Vitol to cease and desist from further violations.
“Federal position limits are important and are in place to prevent this type of manipulation,” said Ian McGinley, Director of Enforcement. “Today’s action demonstrates that the CFTC will use its capacity to examine positions on and between exchanges to enforce compliance and protect the integrity of the futures markets.”
On four occasions, in the months of May and June 2022Vitol held positions above the speculative limit in oil contracts. In December 2022, it held positions above the limit for livestock contracts.
(Photo: Nick Chong on Unsplash)