Olam Group has agreed to pay US$3.25 million ($4.16 million) in a settlement with the Commodity Futures Trading Commission (CFTC).
The settlement stemmed from investigations into Olam’s delayed reporting of five US cotton sales, valued at over US$190 million, which took place in August and September 2021. According to a CFTC statement on Sept 27 (US time), Olam sold over 375,000 bales of cotton to a counterparty in Asia that is said to be one of the largest global purchasers of cotton.
"The order finds rather than immediately reporting those sales to [the] United States Department of Agriculture (USDA) and the CFTC promptly as required, certain Olam employees diverged from Olam’s standard practices, causing the sales to be reported between one to five weeks late," says CFTC.
The order also found that Olam reported inaccurate fixed-price sales data on seven Form 304s submitted to the CFTC from Aug 6, 2021, to Sept 17, 2021. Form 304 allows traders to identify themselves with their public trader identification number.
CFTC's director of enforcement Ian McGinley said Olam's failure to report accurate cotton sales data to the USDA resulted in "inaccurate and misleading information regarding cotton sales" being published. The move also "potentially [impacted] the integrity of commodities pricing", he added.
In its Sept 28 statement, Olam says the settlement neither admits or denies the CFTC’s findings.
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Olam, then Olam International VC2 , agreed to pay US$3 million to settle a complaint levelled by the CFTC in January 2015. The settlement came without an admission or denial of the complaint as well.
Shares in Olam closed flat at $1.13 on Sept 27.
