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Glencore is currently being investigated by the Commodity Futures Trading Commission for potential commodity bribery, the company said Thursday, revealing a new trail of possible liability in the United States.
The Swiss-based trading company has previously leaked a US Department of Justice investigation into possible violations of the Foreign Corrupt Practices Act related to its operations in Nigeria, Venezuela and the Republic of Korea. Democratic Republic of Congo.
"Glencore understands that the CFTC's investigations are at an early stage and have a similar scope to the ongoing US Department of Justice," the company said, adding that it would cooperate with the CFTC.
The CFTC's investigation is another headache for Glencore, the world's most powerful commodity trader, and another sign of the scrutiny the commodities sector is facing in a number of countries. .
In December, Canadian regulators fined Glencore's former copper operations manager $ 1.8 million and banned him from serving on the board of directors for four years after the company's subsidiary company in Congo published misleading financial statements.
The Ontario Securities Commission's investigation also revealed that Katanga Mining, majority-owned by Glencore, had not disclosed his relationship with Israeli businessman Dan Gertler, who had been sanctioned by state United States for its "opaque and corrupt mining and oil operations" in the country. the DRC.
The company and its rivals, Trafigura and Vitol, are also under investigation in Brazil for alleged corruption involving the Brazilian oil company Petrobras.
Glencore disclosed a subpoena by the US Department of Justice last July, requiring records dating back to 2007. In its annual report, the group said the investigation into Nigeria and Venezuela focused on transactions oil.
Tony Hayward, president of Glencore and former boss of the BP oil company, oversaw the company's response to the Justice Department's investigation as part of a panel of inquiry composed of members Glencore's Board of Directors established in July 2018. This committee will also oversee the handling of the file by Glencore. CFTC investigation, said the company.
Glencore's shares have fallen about 8% since the release of the Department of Justice's subpoena, lagging behind most of its peers, as the survey has caused some investors to be wary of the company.
Ivan Glasenberg, Managing Director of Glencore, has repeatedly refused to comment on the DoJ's investigation.
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The fact that its activities in Venezuela and Nigeria, two major oil-producing countries, are being monitored suggests a more general interest in the company's operations. Glencore is the third largest oil trader in the world, with more than 4.5 million barrels a day.
Foreign bribery cases in the United States have always been conducted by the Department of Justice, which may initiate criminal prosecutions, often in partnership with the Securities and Exchange Commission, which is vested with a civilian authority.
The Glencore announcement is the first disclosure of a CFTC investigation involving a corruption risk since the US derivatives regulator announced that it was expanding its mandate regarding of law enforcement in March.
The CFTC does not have the power to initiate criminal prosecution, but may seek civil penalties and trading bans through its authority under the Commodity Exchange Act.
In a speech last month, James McDonald, director of law enforcement at the CFTC, said his agency would avoid encroaching on ongoing investigations and that any fine imposed would take into account penalties imposed by other authorities.
A spokeswoman for the CFTC did not immediately return a request for comment on Glencore's disclosure.
Paul Gait, an badyst at Bernstein Research, said the TCRC's decision represented a "political land grab" to "show we're a gambler".
"Clearly, it does not help Glencore. But it's hard to see that making a difference for the investors who own the stocks and have overcome [the DoJ] thunderstorm".
He added, "Even if the DoJ discovered something, how would the CFTC prove that it had an impact on the US commodity markets? It's hard enough to try to prove that the fundamentals of supply and demand have an impact on the market. "
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