August 15, 2019 / 3:44 PM / 8 days ago

Kraft, Mondelez to pay $16 million in wheat price manipulation case

Aug 15 (Reuters) - The U.S. Commodity Futures Trading Commission (CFTC) said on Thursday Kraft Heinz Co and Mondelez International Inc will pay $16 million in penalty regarding a wheat manipulation case that dates back to 2015.

The CFTC said Kraft and Mondelez came up with a strategy to purchase and stand for delivery on more than 3,000 futures contracts, priced at about $90 million, to send the market a false signal that the companies had demand for wheat.

The lawsuit was filed by wheat futures and options traders who accused Kraft and Mondelez of illegally manipulating the grain’s price at their expense.

The complaint alleged the companies had no intention of sourcing wheat from the futures market and the $90 million of wheat futures at issue exceeded their actual sourcing needs.

The penalty is about three times the companies' alleged gain, the CFTC said in a statement. (bit.ly/2OX1iyo)

Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur

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