WASHINGTON (AP) - Federal regulators have charged two major U.S. food companies, Kraft and Mondelez, with manipulating prices for wheat and wheat futures in a scheme that reaped more than $5.4 million in profit.
WASHINGTON (AP) — Federal regulators have charged two major U.S. food companies, Kraft and Mondelez, with manipulating prices for wheat and wheat futures in a scheme that reaped more than $5.4 million in profit.
The Commodity Futures Trading Commission announced the civil charges Wednesday against the two companies. The agency said the companies used "manipulative trading strategies" in December 2011 to artificially lower wheat prices on the spot market.
The CFTC also said Kraft Food Groups Inc. and Mondelez Global LLC violated rules limiting the volume of futures contracts in wheat that financial investors can trade on exchanges.
The agency also accused the companies of making trades in wheat futures that violated rules of competition from 2003 through January 2014.
Kraft, based in Northfield, Illinois, makes Oscar Meyer cold cuts, Jell-O pudding and Velveeta cheese, among other well-known brands. Oreo cookies, Cadbury chocolate and Trident gum are among the brands of Deerfield, Illinois-based Mondelez.
Most of the alleged violations occurred while Mondelez and Kraft were still one company. They split in October 2012, with Kraft keeping North American grocery brands and Mondelez taking the snacks with a bigger global presence.
Kraft said in a statement that it doesn't expect the CFTC case to have a significant impact on its financial position. Mondelez disclosed in February that it expects "to predominantly bear any monetary penalties or other payments that the CFTC may impose."
The CFTC said it is seeking unspecified penalties and restitution as well as an injunction against future violations of U.S. commodities laws.
Representatives for Mondelez didn't immediately return a telephone call seeking comment on the CFTC action.