News
10/24/23 | Firm News
Kirby McInerney announces CFTC settlement of whistleblower claims related to Ceres Global’s attempted manipulation of oats futures contracts
Published in: Business Wire
24, 2023 NEW YORK—(BUSINESSWIRE)—The law firm of Kirby McInerney LLP is proud to announce that it represented a whistleblower who provided support to the Commodity Futures Trading Commission (the “CFTC”). In connection with that matter, the CFTC obtained a $3 million settlement.
The case concerns the attempted manipulation by Ceres Global – which procures, merchandises, and stores grains and other energy and industrial products – of the price of oats futures from approximately June 13, 2016 to July 15, 2016, and again from January 1, 2017 to March 15, 2017. “This case underscores the degree to which whistleblowers can play a critical role in helping regulators police esoteric markets,” said Kirby McInerney Co-Managing Partner David Kovel, who oversaw the case. “Our client came forward and helped the CFTC see into this obscure and illiquid market.”
In its settlement order, the CFTC stated that “Ceres attempted to manipulate the price of oats futures in an effort to profit from futures trading and gain competitive advantages over their competitors by obtaining higher quality oats from the futures delivery process. In its effort to affect oats futures prices, Ceres built large long positions at or close to the spot month speculative limits, held those long positions into the delivery period, and took delivery of oats. Senior personnel at Ceres knew about and facilitated the attempted manipulation.”
In addition to the monetary penalty, as part of the settlement, Ceres has agreed to measures designed to prevent future attempted manipulation, including personnel training, third-party review of internal policies and procedures and strengthening of those policies and procedures, and designation of a Chief Compliance Officer tasked with ensuring compliance with the Commodity Exchange Act.
“We are very pleased with this outcome for the CFTC,” said Kovel. “We hope that the penalty and the prophylactics the settlement requires will help to prevent similar misconduct in the future." Kirby McInerney extends its gratitude to its client and to the CFTC for investigating and pursuing this case.
* * *
Kirby McInerney is a New York-based law firm concentrating in whistleblower, securities, antitrust, and consumer litigation. The firm’s efforts on behalf of investors, consumers, and the government have resulted in recoveries totaling billions of dollars. The firm represents whistleblowers in numerous programs, including in the SEC, CFTC, and IRS whistleblower programs and in cases under the federal and state False Claims Acts.
Kirby McInerney has been involved in some of the most cutting-edge areas of commodities litigation, and represented the whistleblower who received nearly $200 million, the largest CFTC whistleblower award ever.
The firm’s commodity litigation experience includes cases involving the manipulation of agricultural, energy, fixed income, foreign exchange, metals, and other markets. Notably, Kirby McInerney served as co-lead counsel for a class of exchange-based plaintiffs in the high-profile In re LIBOR-Based Financial Instruments Antitrust Litig., No. 11 MD 2262 (S.D.N.Y.) and secured, to date, settlements totaling $187 million for Eurodollar Futures traders. This amount represents the largest recovery in a “futures-only” commodities class action litigation.
Kirby McInerney’s CFTC Whistleblower Team is led by the firm’s Co-Managing Partner, David Kovel, who was previously a commodities trader for a large financial firm.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Kirby McInerney LLP
David E. Kovel, Esq.
212-371-6600
https://www.kmllp.com
dkovel@kmllp.com
The case concerns the attempted manipulation by Ceres Global – which procures, merchandises, and stores grains and other energy and industrial products – of the price of oats futures from approximately June 13, 2016 to July 15, 2016, and again from January 1, 2017 to March 15, 2017. “This case underscores the degree to which whistleblowers can play a critical role in helping regulators police esoteric markets,” said Kirby McInerney Co-Managing Partner David Kovel, who oversaw the case. “Our client came forward and helped the CFTC see into this obscure and illiquid market.”
In its settlement order, the CFTC stated that “Ceres attempted to manipulate the price of oats futures in an effort to profit from futures trading and gain competitive advantages over their competitors by obtaining higher quality oats from the futures delivery process. In its effort to affect oats futures prices, Ceres built large long positions at or close to the spot month speculative limits, held those long positions into the delivery period, and took delivery of oats. Senior personnel at Ceres knew about and facilitated the attempted manipulation.”
In addition to the monetary penalty, as part of the settlement, Ceres has agreed to measures designed to prevent future attempted manipulation, including personnel training, third-party review of internal policies and procedures and strengthening of those policies and procedures, and designation of a Chief Compliance Officer tasked with ensuring compliance with the Commodity Exchange Act.
“We are very pleased with this outcome for the CFTC,” said Kovel. “We hope that the penalty and the prophylactics the settlement requires will help to prevent similar misconduct in the future." Kirby McInerney extends its gratitude to its client and to the CFTC for investigating and pursuing this case.
* * *
Kirby McInerney is a New York-based law firm concentrating in whistleblower, securities, antitrust, and consumer litigation. The firm’s efforts on behalf of investors, consumers, and the government have resulted in recoveries totaling billions of dollars. The firm represents whistleblowers in numerous programs, including in the SEC, CFTC, and IRS whistleblower programs and in cases under the federal and state False Claims Acts.
Kirby McInerney has been involved in some of the most cutting-edge areas of commodities litigation, and represented the whistleblower who received nearly $200 million, the largest CFTC whistleblower award ever.
The firm’s commodity litigation experience includes cases involving the manipulation of agricultural, energy, fixed income, foreign exchange, metals, and other markets. Notably, Kirby McInerney served as co-lead counsel for a class of exchange-based plaintiffs in the high-profile In re LIBOR-Based Financial Instruments Antitrust Litig., No. 11 MD 2262 (S.D.N.Y.) and secured, to date, settlements totaling $187 million for Eurodollar Futures traders. This amount represents the largest recovery in a “futures-only” commodities class action litigation.
Kirby McInerney’s CFTC Whistleblower Team is led by the firm’s Co-Managing Partner, David Kovel, who was previously a commodities trader for a large financial firm.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Kirby McInerney LLP
David E. Kovel, Esq.
212-371-6600
https://www.kmllp.com
dkovel@kmllp.com
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