Risk & Compliance

Credit Suisse Fined $665K Over Futures Trading

The CFTC also said Credit Suisse submitted false or misleading information to show it was in compliance with position limit rules.
Matthew HellerMarch 22, 2016
Credit Suisse Fined $665K Over Futures Trading

The U.S. Commodity Futures Trading Commission on Tuesday charged Credit Suisse International (CSI) with violating rules that limit speculation on agricultural futures contracts.

According to the CFTC, the bank exceeded the speculative position limit for Chicago Board of Trade wheat futures contracts on several days in April and June 2009 even though it had been granted an increased hedge exemption that raised its limit.

The CFTC also said Credit Suisse submitting false or misleading information to show it was in compliance with the rules. To settle all the charges, Credit Suisse agreed to pay $665,000 in civil monetary penalties.

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The all-months speculative position limit for CBOT wheat futures is 6,500 contracts. In 2008, the CFTC granted Credit Suisse’s request for an increase in the hedge exemption for all agricultural commodities.

“Despite having received this increased hedge exemption, on several days in April and June 2009 CSI exceeded its increased all-months speculative position limits for CBOT wheat futures contracts,” the CFTC said in an administrative order.

On April 1, 2009, for example, Credit Suisse had an all-months CBOT wheat futures net long position of 9,831 contracts, exceeding its increased position limit by 2,023 contracts.

After the CFTC opened an investigation into Credit Suisse’s speculative positions, the bank submitted documentation purporting to reflect, among other things, its futures position in April and June 2009.

Credit Suisse submitted “materially false or misleading information reflecting … inflated hedge exemptions for CBOT wheat futures contracts,” the commission said.

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