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CFTC sues Kraft, Mondelez over alleged wheat price manipulation

A March 7, 2012 photo shows a plate of OA March 7, 2012 photo shows a plate of O

The U.S. Commodity Futures Trading Commission on Wednesday charged Kraft Foods Group Inc and Mondelez Global LLC with manipulation of prices of wheat used in products such as Oreo and Chips Ahoy! cookies.

The regulator alleged that Kraft and Mondelez bought $90 million of wheat futures, or a six-month supply, but never intended to take delivery of the wheat.

The two then earned more than $5.4 million in profits as the market shifted prices in reaction to the enormous position, the CFTC said.

The regulator said it was seeking a permanent injunction from future violations by the two companies, as well as disgorgement and civil monetary penalties.

Kraft said it did not expect the matter to have a financially material impact and that Mondelez International would predominantly bear the costs of the matter.
The complaint focused primarily on trading that occurred before Kraft spun off Mondelez, Kraft said.