WASHINGTON – Tyson Foods Inc., Springdale, Ark., was ordered to pay a $1.5 million civil penalty to settle charges 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, the Commodity Futures Trading Commission (CFTC) said.
“The order recognizes Tyson’s substantial cooperation with the investigation, including its self-reporting of additional violations after commencement of the investigation, and acknowledges Tyson’s representations concerning its remediation in connection with this matter,” the CFTC said. “As stated in the order, the CFTC recognizes Tyson’s substantial cooperation and remediation in the form of a reduced civil monetary penalty.”
The CFTC said Tyson held positions in CBOT soybean meal futures in excess of applicable federal position limits on more than 590 dates over a five-year period between January 2016 and January 2021. The meat and poultry processor 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 agency said.
Additionally, 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 CFTC also found 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.