March 22, 2016

CFTC Orders Payment of Penalties Totaling $665,000 by Credit Suisse International for Violating the Speculative Position Limit for Wheat Futures and by Credit Suisse Securities (USA) LLC for Submitting False or Misleading Information to the CFTC

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges that Credit Suisse International (CSI) of London, U.K., exceeded the CFTC all-months speculative position limit for the Chicago Board of Trade (CBOT) wheat futures contracts on several days in April and June 2009, despite having been granted an increased hedge exemption by the CFTC.

The CFTC Order also finds that Credit Suisse Securities (USA) LLC (CSS-USA), based in New York, N.Y., submitted to the CFTC’s Division of Enforcement (Enforcement) in its investigation of this matter materially false or misleading information reflecting certain inflated swap positions and thus inflated hedge exemptions for CBOT wheat futures contracts for CSS-USA, CSI, and other affiliates for several days in April and June 2009.

The Order finds that despite having received an increased hedge exemption that increased its all-months position limit in CBOT wheat futures contracts, CSI nevertheless exceeded its increased all-months position limit on several days in April and June 2009. For example, on April 1, 2009, CSI had an all-months CBOT wheat future net long position of 9,831 contracts, which exceeded its increased position limit by 2,023 contracts.

The Order further finds that in March 2013, CSS-USA submitted to Enforcement, through counsel, documents purporting to reflect, among other information, Credit Suisse’s futures position related to its credit migratory exemption for the relevant days in April and June 2009. While the March 2013 submission purportedly reflected that Credit Suisse had larger credit migratory swap positions and thus larger hedge exemptions in April and June 2009 than had been previously reported to the CFTC, the submission in fact reflected inflated credit migratory swap positions and thus inflated hedge exemptions, making them materially false or misleading.

The CFTC Order requires CSI to pay a $525,000 civil monetary penalty and to cease and desist from further violations of section 4a(b)(2) of the Commodity Exchange Act (CEA) and CFTC Regulation 150.2, as charged.  For the false statements charge, CSS-USA is required to pay a $140,000 civil monetary penalty and to cease and desist from further violations of section 6(c)(2) of the CEA, as charged.

The CFTC acknowledges the assistance of the U.K. Financial Conduct Authority. 

The CFTC’s Division of Market Oversight staff members responsible for this matter are Matthew Hunter, Kenneth Danger, Drew Saunders, and Arek Nowak. The CFTC Division of Enforcement staff members responsible for this action are Michael R. Berlowitz, W. Derek Shakabpa, David Acevedo, Trevor Kokal, Jordon Grimm, Lenel Hickson, Jr., and Manal Sultan.

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Last Updated: March 22, 2016