Connecticut-based Trader to Pay Criminal Penalty and Forfeit Ill-Gotten Gains
New York, USA – Freepoint Commodities LLC, a leading commodities trader, has agreed to pay a total of over $98 million to settle charges brought against them in the United States. The charges revolve around allegations of misappropriating material non-public information and bribing Brazilian officials as part of a scheme. The settlement includes a $68 million criminal penalty to be paid to the Justice Department, along with forfeiting an additional $30 million. Freepoint has also agreed to relinquish $7.6 million in ill-gotten gains in connection with related charges from the Commodity Futures Trading Commission (CFTC). This settlement resolves the probe conducted by both the DOJ and the CFTC.
According to statements from both agencies, the commodities trader carried out the scheme between 2012 and 2018. Their aim was to acquire material nonpublic information and bribe government officials in Brazil, specifically targeting Petróleo Brasileiro S.A., the state-owned oil company. Corrupt practices are unfortunately prevalent in jurisdictions where commodities traders operate, making them susceptible to violating the U.S. law against bribing foreign officials.
Notably, this is not an isolated case. Glencore PLC, a multinational commodities trading firm, was previously ordered to pay $700 million after pleading guilty to a ten-year-long bribery scheme. Similarly, a Vitol unit settled a DOJ and Brazil corruption investigation by paying $135 million in fines.
This investigation involving Freepoint Commodities was previously reported by Reuters. It sheds light on the ongoing efforts by U.S. and Brazilian authorities to uncover and address corruption in the commodities trading industry.