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CFTC orders Tyson Foods to pay $1.5 million for position limit, reporting, and recordkeeping violations

Christian Fernsby |
The Commodity Futures Trading Commission filed and settled charges against Tyson Foods, Inc., for exceeding the CFTC’s position limits for soybean meal futures contracts traded on the Chicago Board of Trade (CBOT) and for failing to comply with reporting and recordkeeping obligations regarding its cash positions in grains.

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The order requires Tyson to pay a $1.5 million civil monetary penalty and to cease and desist from violating the Commodity Exchange Act and CFTC regulations as charged.

The order finds that on more than 590 dates over a five-year period between January 2016 and January 2021, Tyson held positions in CBOT soybean meal futures in excess of then-applicable federal position limits. Tyson did so without the benefit of a hedge exemption for soybean meal.

On those dates, Tyson’s positions were, on average, 2,473 contracts—or 38%—over the then-applicable 6,500-contract limit, and its net long futures positions exceeded the limit by as much as 7,057 contracts.

The order also finds that, in all but two months from at least January 2016 through August 2020, Tyson filed with the CFTC incorrect Form 204 (Statements of Cash Positions in Grain) that reported non-existent fixed-price cash sales of soybean meal, overstated fixed-price cash sales of corn, and failed to report purchases and sales from Tyson’s grain elevators.

The order also finds that Tyson failed to maintain certain records of cash transactions relating to futures positions in excess of position limits, in violations of then-applicable recordkeeping requirements.

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