Home / Knowledge / News / Textiles / CFTC punishes JPMorgan for violating cotton position curbs
CFTC punishes JPMorgan for violating cotton position curbs
Sep '12
The U.S. Commodity Futures Trading Commission (CFTC) announced that JP Morgan Chase Bank, N.A. (JPMCB) agreed to pay a $600,000 civil monetary penalty to settle CFTC charges that it exceeded speculative position limits in Cotton No. 2 futures contracts trading on the IntercontinentalExchange U.S. (ICE). 

According to the CFTC order, JPMCB held net short futures equivalent positions in Cotton No. 2 futures contracts in excess of CFTC speculative position limits on several days between September 16, 2010 and October 5, 2010 (the relevant period). The CFTC’s speculative position limits for Cotton No. 2 futures are 3,500 contracts in a single month and 5,000 contracts in all months combined. According to the order, during the relevant period JPMCB had a long-side hedge exemption in Cotton No. 2 futures, but its short-side positions remained subject to the 3,500 and 5,000 contract limits. The order finds that JPMCB held short positions in excess of both the single-month and all-months speculative position limits during the relevant period.
The order further finds that JPMCB held those positions as a result of an inadvertent deficiency in its automated position limit monitoring system, which generates a report used by commodity traders to track their current positions relative to the applicable speculative position limits. However, as originally configured, the automated monitoring system did not differentiate between the different long- and short-side position limits applicable to JPMCB’s trading in Cotton No. 2 futures, the order finds. After learning of this deficiency, JPMCB utilized a manual position limit monitoring procedure pending correction of the automated monitoring system, according to the order. Despite adoption of this manual position limit monitoring procedure, JPMCB violated its short-side speculative position limit on several occasions during the relevant period, the order finds.
In addition to imposing the $600,000 civil monetary penalty, the CFTC order requires JPMCB to cease and desist from further violations of Section 4a(b)(2) of the Commodity Exchange Act and CFTC regulation 150.2, as charged.
The CFTC appreciates the assistance of the ICE staff.
CFTC staff members responsible for this case are Melanie Bates, Kara Mucha, James A. Garcia, Michael Solinsky, Gretchen L. Lowe and Vincent McGonagle of the CFTC’s Division of Enforcement, and Walter Spilka of the CFTC’s Division of Market Oversight.

The U.S. Commodity Futures Trading Commission (CFTC)

Must ReadView All

Union textiles minister Smriti Irani addressing at the Texprocil Annual Export Awards. Courtesy: PIB

Textiles | On 22nd Oct 2016

Govt to extend special package to home textiles segment

The Central government is likely to extend the recently approved Rs...

Reebok Liquid Speed Grey. Courtesy: Business Wire

Apparel/Garments | On 22nd Oct 2016

Reebok’s Liquid Factory brings sneaker creation to US

Reebok, a pioneer in the sporting goods industry, has brought sneaker ...

Courtesy: GHCL

Textiles | On 22nd Oct 2016

GHCL to invest Rs 67.25 crore in textile division

Chemicals and textiles firm GHCL will invest Rs 67.25 crore in its...

Interviews View All

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Mukesh Agarwal & Rajesh Agarwal
Madhuram Fincap Pvt Ltd

Increasing prices and lack of demand main issues facing industry

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

October 2016

October 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Advanced Search