Wheat Price Manipulation Charges Filed Against Kraft Foods, Mondelez
Shares of both companies were largely unchanged but volatile in after-hours trading.
Pending charges were disclosed by Kraft and Mondelēz in October and the companies said any resulting costs will be born by Mondelēz. Neither company expects financial results will be affected.
Kraft spun off its snack foods business as Mondelēz in 2012. Separately, H.J. Heinz Co. and Kraft unveiled merger plans last week.
The U.S. Commodity Futures Trading Commission filed the civil action in the U.S. District Court for the Northern District of Illinois Wednesday.
According to the commission, Kraft and and Mondelēz bought $90 million of December 2011 wheat futures, which amounted to a six-month supply of wheat.
The companies allegedly didn't intend to take delivery and expected the market would react by strengthening the spread between December 2011 wheat and March 2012 wheat futures.
Those price shifts did occur and, according to the complaint, Kraft and Mondelēz earned over $5.4 million in profits.
The action against the companies seeks a permanent injunction from future violations of federal commodities laws, disgorgement, and civil monetary penalties.
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