May 11, 2015

CFTC Orders Libero Commodities SA to Pay $480,000 for Call Cotton Reporting Violations

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Libero Commodities SA (Libero), an agricultural trading company, for failing to comply with its legal obligation as a reportable trader to submit weekly CFTC Form 304 Reports that show its call cotton purchases and sales, in violation of CFTC Regulation 19.02. Libero’s principal office is in Geneva, Switzerland, and it maintains another office in Mato Grasso, Brazil.

The Order requires Libero to pay a $480,000 civil monetary penalty and prohibits it from committing future violations of the CFTC Regulation, as charged. The Order also states that Libero has adopted written procedures regarding future compliance with the CFTC cotton reporting Regulation and that Libero will undertake to adopt and maintain internal controls that are reasonably designed to ensure that it complies fully with those written compliance procedures.

Specifically, the Order finds that, on approximately 200 occasions from when Libero commenced trading in May 2010, through April 29, 2014, Libero held or controlled at least 100 cotton futures positions, but failed to file weekly CFTC Form 304 Reports as required.

As described in the Order, cotton merchants and dealers that hold or control at least 100 cotton futures positions, the reportable level for cotton futures contracts under CFTC Regulations, are required to file CFTC Form 304 Reports that show their call cotton purchases and sales as of the close of business Friday, and no later than two business days following the date of the report.

According to the Order, call cotton refers to physical cotton bought or sold, or contracted for purchase or sale, at a price to be fixed later based on a specified delivery month’s futures price. The CFTC uses information it gathers from CFTC Form 304 Reports in its weekly Cotton On-Call Reports, published with other Market Reports on the CFTC website.

The CFTC previously issued a market Advisory reminding cotton market participants of their ongoing obligation to comply in a timely manner with applicable reporting obligations (see CFTC Staff Advisory No. 13-14 (Obligation of Reportable Market Participants to File CFTC Form 304 Reports for Call Cotton in a Timely Manner as Required by Commission Regulation 19.02, May 8, 2013).

The CFTC Division of Enforcement staff members responsible for this case are Elizabeth Davis, Erica Bodin, and Rick Glaser. The CFTC acknowledges the assistance of Janet Briner, Kelly Beck, Harold Hild, and Matthew Hunter of the CFTC’s Division of Market Oversight in connection with this matter.

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Last Updated: May 11, 2015