Thanks to Whistleblower, CFTC Sanctions Trafigura $55 Million in Corruption Case

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Jun 17, 2024, 17:59 ET

WASHINGTON, June 17, 2024 /PRNewswire/ -- Today, the U.S. Commodity Futures Trading Commission (CFTC) announced a $55 million enforcement action against Trafigura Trading LLC over allegations that the global commodities trader engaged in corruption and market manipulation relating to oil trading. The case is the result of a disclosure filed by a whistleblower through the CFTC Whistleblower Program.

"This is a great day for accountability and for fighting transnational corruption," said Kohn, Kohn & Colapinto founding partner Stephen M. Kohn, who represented the whistleblower during the CFTC's confidential investigation. "Whistleblowers demonstrate immense bravery in coming forward. During the course of the entire lengthy investigation the CFTC's staff demonstrated professionalism and a deep respect for the stress and hardship whistleblowers face," Kohn added.

The sanctions also cover allegations that Trafigura illegally impeded the rights of employees to blow the whistle through the use of restrictive non-disclosure agreements (NDAs). This marks the first sanctions ever levied by the CFTC for such a violation. KKC also represented a whistleblower in the first enforcement action filed by the U.S. Securities and Exchange Commission (SEC) for NDAs which restrict whistleblowing.

"This is a giant breakthrough in the international commodities market," said Kohn. "This enforcement action sends a message that the CFTC is joining with other agencies in cracking down on the use of illegal NDAs which restrict whistleblowing. The CFTC knows that whistleblowers are critical to its enforcement efforts and is clearly committed to ensuring that companies, including privately held ones such as Trafigura, are not able to silence whistleblowers through NDAs."

According to the CFTC, Trafigura "traded gasoline while in knowing possession of material nonpublic information it knew or should have known had been misappropriated from a Mexican trading entity (MTE)" and "manipulated a fuel oil benchmark to benefit its futures and swaps positions, including derivatives traded on United States registered entities."

"Holding a multinational company headquartered in Singapore accountable for misconduct which occurred in Mexico further demonstrates the transnational scope and impact of U.S. laws and whistleblower programs," Kohn said. "The CFTC Whistleblower Program is proving to be a critical tool in efforts to combat corruption globally," he added.

"The fact that the CFTC has joined the ranks of law enforcement agencies fighting corruption in recent years is a major advance in putting an end to bribery, money laundering and market manipulation," Kohn continued. "Corruption has a disproportionate negative impact towards developing nations and the poor. U.S. law enforcement can play a major role in ensuring this misconduct does not go unchecked."

Kohn will be participating at the 2024 International Anti-Corruption Conference (IACC) in Lithuania from June 18-21. On June 20, he will be teaching an exclusive workshop: "Whistleblower Awards Go Global: How to Use Transnational Anti-Corruption Laws." To learn more and register your interest, head to the event page here.

Mr. Kohn is available for further comment on the matter.

Contact: Kate Reeves
[email protected]

SOURCE Kohn, Kohn & Colapinto LLP