Glencore Pleaded Guilty to Manipulating U.S. Fuel-Oil Price Benchmarks

Summary

Glencore Ltd. pleaded guilty in May 2022 to conspiracy to manipulate commodity prices after admitting that employees deliberately manipulated benchmark fuel-oil prices used in physical and derivatives markets. Between approximately 2011 and 2019, Glencore traders submitted bids and offers during daily S&P Global Platts pricing windows with the intention of artificially pushing benchmark prices up or down at the ports of Los Angeles and Houston. The DOJ said the trades were made not for legitimate economic reasons but to benefit Glencore's physical fuel-oil contracts and derivatives positions. U.S. Department of Justice – Glencore guilty plea: https://www.justice.gov/usao-sdny/pr/glencore-entered-guilty-pleas-foreign-bribery-and-market-manipulation-conspiracies For example, when Glencore was buying fuel oil, employees could submit offers designed to push the benchmark downward, reducing the price Glencore paid. Prosecutors said the manipulation created prices that did not reflect legitimate supply and demand. Glencore agreed to a $341.2 million criminal fine and $144.4 million in forfeiture in the criminal market-manipulation case. It also agreed to retain an independent compliance monitor for three years. Separately, the Commodity Futures Trading Commission found manipulative and fraudulent conduct involving Glencore and imposed a broader $1.186 billion resolution, including penalties and disgorgement covering manipulation and corruption. The CFTC said Glencore engaged in benchmark manipulation or attempted manipulation on hundreds of days. CFTC – Glencore manipulation enforcement: https://www.cftc.gov/PressRoom/PressReleases/8534-22 Company response: Glencore acknowledged the historical misconduct, entered the guilty plea and said it had strengthened its compliance program, controls and corporate culture. Glencore statement: https://www.glencore.com/media-and-insights/news/glencore-reaches-coordinated-resolutions-with-us-uk-and-brazilian-authorities Key facts: Criminal guilty plea; manipulation from approximately 2011–2019; benchmarks covering major U.S. fuel-oil markets; conduct intended to increase Glencore's profits or reduce costs; and approximately $485.6 million in criminal fine and forfeiture associated with the DOJ market-manipulation resolution.