Dairy Farmers of America, Inc. (DFA) announced today that it has reached a settlement with the Commodity Futures Trading Commission (CFTC) for a civil monetary penalty of $12 million. The settlement ends the CFTC's investigation into DFA's trading activities on the Chicago Mercantile Exchange (CME) in 2004.
Without admitting or denying the CFTC's findings in the administrative order, DFA and two of its former officers agreed to pay the negotiated aggregate civil monetary penalty of $12 million. The cooperative also agreed to not engage in speculative trading in milk futures contracts for two years and to retain a monitor to review its trading activities on the CME during that period.
DFA President and CEO Rick Smith says that agreeing to the settlement was in the best interests of the cooperative and its members. "Settling this matter will allow us to focus wholly on serving our members and moving the cooperative forward,” says Smith, who took the helm of DFA in 2006.
"The transactions addressed by the settlement took place over a one-month period more than four years ago,” said Smith. "We have fully cooperated with the CFTC's investigation and wanted to put this matter behind us.”
Prior to reaching the settlement agreement, DFA management voluntarily developed and implemented new policies and procedures designed to ensure that all trading complies with both the spirit and the letter of the law.
DFA is America's leading milk marketing cooperative, marketing 20% (some 37 billion pounds) of the nation's milk annually. It is owned by 18,000 dairy farmers nationwide.