United States: Federal Court Grants Injunction, Sanctions Under CFTC Cattle Fraud Program

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US District Court for the Eastern District of Washington has approved a consent order in CFTC action against livestock supplier for allegedly making false statements to the Chicago Mercantile Exchange “regarding its inventory, purchases and sales of livestock.” and violated the position limits set by the exchange.

The consent order concluded that the supplier had committed for years to attempting to fraudulently file invoices and reimbursement claims for livestock on behalf of a beef producer, without raising or purchasing the livestock as it is. ‘He is represented. The CFTC’s initial allegations were made in a lawsuit on March 31, 2021, against the livestock supplier and its former chairman. The CFTC’s complaint included allegations that the provider made false allegations to the Chicago Mercantile Exchange and violated position limits set by the exchange in connection with its fraud.

The order requires the livestock supplier to “pay a combined sum of $ 263 million in restitution and civil fines in a phantom livestock fraud scheme.”

In dissent, CFTC commissioner Dawn Stump disagreed with the CFTC’s decision to pursue a fraud charge in addition to the position limit and misrepresentation charges. Ms Stump criticized the CFTC for “injecting[ing] itself in this spot market, sole victim, commercial fraud “and expressed concern that market participants would view the agency’s action as undue interference with the government. the consent order.

Primary sources

  1. CFTC Press Release: Federal Court Orders Washington State Feedyard to Pay $ 263 Million for Ghost Cattle Fraud Program and Violation of Position Limits
  1. CFTC Order Authorizing Joint Motion to Enter Consent Order in CFTC v. Easterday, et al.
  1. Dissenting statement by CFTC Commissioner Dawn D. Stump regarding the settlement with Easterday Ranches, Inc.

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