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      • CBOT 17-0851-BC-1
      • Effective Date
      • 26 June 2020

      The Andersons, Inc.


      Rule 432 (“General Offenses”) (in relevant part)

      It shall be an offense:

      B. 2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;

      Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;

      T. to engage in dishonorable or uncommercial conduct.


      Pursuant to an offer of settlement in which The Andersons, Inc. (“The Andersons”) neither admitted nor denied the rule violations upon which the penalty is based, on June 24, 2020, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that in November and December 2017, The Andersons executed a strategy to benefit their futures and options position by registering 2,000 contracts of December 2017 Soft Red Winter Wheat (“SRW”) certificates. The Andersons registered the certificates with the belief that the wheat spread would widen and trade into its resting bids. The Andersons then repurchased certificates at reduced prices.

      The Andersons held over 60% of the short open interest in the December 2017 SRW contract on the day immediately before First Notice Day. In anticipation of the market impact of its registration, The Andersons placed bids in front month spreads outside of previously existing trading ranges, including some at prices at which the spread had never previously traded. The Andersons expected that the size and timing of the registration coupled with the wheat economics could cause the spread to significantly widen.

      Further, The Andersons sold SRW to local mills in the Toledo geographical area in order to limit the demand for SRW in the month prior to its registration.

      On November 29, 2017, The Andersons registered 2,000 SRW certificates, causing the market to widen and to trade into The Andersons’ resting bids at prices beneficial to its wheat futures position. In addition, The Andersons were prepared to register even more SRW certificates in the event its resting bids were not filled. Further, the registration was only economical due to the large size and minimum load out cadence.

      Finally, between December 4, and December 22, 2017, The Andersons repurchased 1,330 of the 2,000 certificates, through the delivery process and the secondary market, all at lower prices than the original registration.

      The Panel concluded that The Andersons thereby violated CBOT Rules 432.B.2., 432.Q., and 432.T.


      In accordance with the settlement offer, the Panel ordered The Andersons to pay a fine of $2,000,000.