UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

TYSON FOODS, INC., 

Respondent.

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CFTC Docket No. 21-12

ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTION 6(c) AND (d) OF 

THE COMMODITY EXCHANGE ACT, MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS 

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

from at least January 2016 through the end of January 2021 (“Relevant Period”), Tyson Foods, 

Inc. (“Tyson” or “Respondent”) violated Sections 4a(b) and 4i of the Commodity Exchange Act 

(“Act”), 7 U.S.C. §§ 6a(b), 6i (2018), Commission Regulation (“Regulation”) 1.31(b)(3) and (c), 

17 C.F.R. § 1.31(b)(3), (c) (2020), and the then-effective versions of Regulations 19.01(a), 

17 C.F.R. § 19.01(a) (2020) (“Former Regulation 19.01(a)”), removed by Position Limits for 

Derivatives, 86 Fed. Reg. 3236 (Jan. 14, 2021) (effective Mar. 15, 2021), and 150.2, 

17 C.F.R. § 150.2 (2020) (“Former Regulation 150.2”), amended by Position Limits for 

Derivatives, 86 Fed. Reg. 3236. Therefore, the Commission deems it appropriate and in the 

public interest that public administrative proceedings be, and hereby are, instituted to determine 

whether Tyson engaged in the violations set forth herein and to determine whether any order 

should be issued imposing remedial sanctions. 

In anticipation of the institution of an administrative proceeding, Tyson has submitted an 

Offer of Settlement (“Offer”), which the Commission has determined to accept. Without 

admitting or denying any of the findings or conclusions herein, Tyson consents to the entry of 

this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Act, Making Findings, 

and Imposing Remedial Sanctions (“Order”), and acknowledges service of this Order.1

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 Tyson consents to the use of the findings of fact and conclusions of law in this Order in this proceeding 

and in any other proceeding brought by the Commission or to which the Commission is a party or 

claimant, and agrees that they shall be taken as true and correct and be given preclusive effect therein, 

without further proof. Tyson does not consent, however, to the use of this Order, or the findings or 

conclusions herein, as the sole basis for any other proceeding brought by the Commission or to which the 

Commission is a party or claimant, other than: a proceeding in bankruptcy or receivership; or a 
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II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

On more than 590 dates during the Relevant Period, Tyson held positions in Chicago 

Board of Trade (“CBOT”) soybean meal futures contracts that exceeded the all-months position 

limit in Former Regulation 150.2, 17 C.F.R § 150.2 (2020). Tyson thereby violated Section 

4a(b) of the Act, 7 U.S.C. § 6a(b) (2018), and Former Regulation 150.2. 

In all but two months from at least January 2016 through August 2020, Tyson filed with 

the Commission incorrect Form 204 Statements of Cash Positions in Grain by reporting the 

approximate number of open futures contracts it was using to hedge anticipated unfilled 

requirements in soybean meal and corn. In so doing, it reported non-existent fixed-price cash 

sales of soybean meal, and substantially overstated its fixed-price cash sales of corn. In addition, 

for the entire Relevant Period, Tyson incorporated an incorrect pounds-to-bushels conversion 

factor and that resulted in understated cash purchases of soybean oil. By filing these incorrect 

Form 204s, Tyson violated the Former Regulation 19.01(a), 17 C.F.R § 19.01(a) (2020). 

Tyson failed to maintain certain records of cash transactions relating to futures positions 

in excess of position limits during the Relevant Period. Such records are required by Regulation 

1.31(b)(3) and (c), 17 C.F.R. § 1.31(b)(3), (c) (2020), to be maintained for a period of five years 

and in a form and manner that ensures the authenticity and reliability of such records. 

In accepting Respondent’s Offer, the Commission recognizes the substantial cooperation 

of Tyson with the Division of Enforcement’s investigation of this matter. The Commission also 

acknowledges Respondent’s representations concerning its remediation in connection with this 

matter and Respondent’s self-reporting of certain relevant issues. The Commission’s recognition 

of Respondent’s substantial cooperation and appropriate remediation is further reflected in the 

form of a reduced penalty. 

B. RESPONDENT 

Tyson Foods, Inc. is a global food company specializing in protein production and 

processing. Tyson’s headquarters are located in Springdale, AR. Tyson is not registered with 

the Commission. 

C. FACTS 

During the Relevant Period, federal position limits in Former Regulation 150.2 prohibited 

persons from holding an all-months position in soybean futures in excess of 6,500 contracts net 

 

proceeding to enforce the terms of this Order. Tyson does not consent to the use of the Offer or this 

Order, or the findings or conclusions in this Order, by any other party in any other proceeding. 
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long or short.2

 Nonetheless, during the Relevant Period, a person could obtain an exemption 

from the 6,500-contract limit under Regulation 150.3, 17.C.F.R. § 150.3 (2020) (“Former 

Regulation 150.3”), amended by Position Limits for Derivatives, 86 Fed. Reg. 3236, if such 

person had “bona fide hedging transactions as defined in § 1.3,” 17 C.F.R. § 1.3 (2020), 

amended by Position Limits for Derivatives, 86 Fed. Reg. 3236. In other words, Former 

Regulation 150.3 provided an exemption for, in relevant part: (a) fixed-price cash purchase or 

sale contracts; or (b) unfilled anticipated requirements, in soybean meal sufficient to offset the 

amount by which the person’s futures position exceeded the limit. 

In order for a person to have obtained an exemption during the Relevant Period for fixedprice purchases or sales, Former Regulation 19.01(a) required a person to file a Form 204 with 

the Commission setting forth the person’s cash exposure to the relevant commodity. In order for 

a person to have obtained an exemption during the Relevant Period for unfilled anticipated 

requirements, a person was required under then-effective Regulation 1.48, 17 C.F.R. § 1.48 

(2020), removed by Position Limits for Derivatives, 86 Fed. Reg. 3236, to file a request with the 

Commission for an anticipatory hedge exemption setting forth, inter alia, the person’s historical 

usage of such commodity. 

Tyson held positions in soybean meal futures in excess of the position limit on more than 

590 separate dates from January 2016 through the end of January 2021. Tyson did so without 

the benefit of an anticipatory hedge exemption for soybean meal. On those dates, Tyson’s 

positions were, on average, 2,473 contracts—or 38%—over the then-applicable 6,500-contract 

limit, and its net long futures positions exceeded the limit by as much as 7,057 contracts. 

Each month from at least January 2016 through August 2020, with two exceptions3

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Tyson filed Form 204s with the Commission reflecting fixed-price cash sales sufficient to offset 

the amount by which Tyson’s futures position exceeded the limit. In reality, depending on the 

particular month, Tyson had either no fixed-price cash sales of soybean meal or substantially 

lower fixed-price cash sales of soybean meal than the Form 204s indicated.4

 Tyson’s method for 

filling out the Form 204s was to take the approximate number of open futures contracts it was 

using to hedge anticipated unfilled soybean meal requirements, convert that number to bushels, 

and then incorrectly report that number on the Form 204 as fixed-price sales contracts.5 Tyson 

 

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 Former Regulation 150.1(c), 17 C.F.R. § 150.1(c) (2020), amended by Position Limits for Derivatives, 

86 Fed. Reg. 3236 (Jan. 14, 2021) (effective Mar. 15, 2021), defined “all months” as “the sum of all 

futures trading months including the spot future.” 

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 Tyson’s December 2019 and February 2020 Form 204s reflected fixed-price cash sales in soybean meal 

slightly below the quantity necessary to offset Tyson’s excess futures position. 

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 Beginning in April 2018, in all but one month, Tyson had some fixed-price cash sales of soybean meal 

from its grain elevators. 

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 One some occasions, Tyson simply copied the number from the prior month’s Form 204, even though 

its unfilled anticipated requirements had changed. 
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misreported its fixed-price corn sales in the same way, i.e., by converting the futures it used to 

hedge corn requirements to bushels and reporting that number as fixed-price sales.6

Once apprised of the foregoing by the Commission’s Division of Enforcement 

(“Division”), Tyson voluntarily undertook to restate its Form 204s for the entire Relevant Period. 

In the process of doing so, Tyson discovered, and self-reported to the Division, that it had been 

understating its cash purchases of soybean oil on the Form 204s because of its use of an 

erroneous pounds-to-bushels conversion factor. Tyson also self-reported that it had been doublecounting portions of its long cash positions in soybean meal and corn on the Form 204s, and that 

it had not been reporting cash purchases and sales from its grain elevators beginning in April 

2018. Tyson also self-reported that it had failed to retain certain daily and monthly cash 

transaction records in soybean meal and corn during the Relevant Period. 

Tyson applied for and received from the Commission an anticipatory hedge exemption 

for soybean meal futures, effective February 2021. 

III. LEGAL DISCUSSION 

A. POSITION LIMIT VIOLATIONS 

Section 4a(b) of the Act, 7 U.S.C. § 6a(b) (2018), makes it unlawful “directly or 

indirectly to hold or control a net long or a net short position in any commodity for future 

delivery . . . in excess of any position limit fixed by the Commission for or with respect to such 

commodity . . . .” During the Relevant Period, the Commission’s all-months position limit for 

soybean meal futures, set forth in Former Regulation 150.2, 17 C.F.R. § 150.2 (2020), was 6,500 

contracts net long or short. 

The Commission is not required to establish scienter—i.e., proof of intent to exceed the 

applicable position limit—to prove a violation of position limits. Saberi v. CFTC, 488 F.3d 

1207, 1212 (9th Cir. 2007); CFTC v. Hunt, 591 F.2d 1211, 1218 (7th Cir. 1979). Moreover, the 

Act “unambiguously imposes liability” for position limit violations. Saberi, 488 F.3d at 1212 n.4 

(rejecting a trader’s contention that the Division was required to prove that he intended to violate 

the speculative position limits) (citing Hunt, 591 F.2d at 1218). 

Because Tyson held positions in the CBOT soybean meal futures contract in excess of the 

all-months position limit for that contract on more than 590 dates during the Relevant Period, 

Tyson violated Section 4a(b) of the Act and Former Regulation 150.2. 

B. INACCURATE FORM 204s 

Section 4i of the Act, 7 U.S.C. § 6i (2018), makes it unlawful for any person to make any 

contract for the purchase or sale of any commodity for future delivery on or subject to the rules 

of any contract market in excess of position limits established by the Commission, “unless such 

 

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 Prior to the Relevant Period, Tyson had applied for and received an anticipatory hedge exemption for 

corn. Tyson was nonetheless required under Former Regulation 19.01 to file an accurate Form 204 

because its corn futures position was in excess of the federal limit set forth in Former Regulation 150.2. 
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person files or causes to be filed with the properly designated officer of the Commission such 

reports regarding any transactions or positions [in excess of position limits] as the Commission 

may by rule or regulation require.” During the Relevant Period, Former Regulation 19.01(a), 

17 C.F.R. § 19.01(a) (2020), required all persons holding futures positions in excess of position 

limits for certain commodities including soybean meal, any part of which constituted a bona fide 

hedging position, to file a Form 204 with the Commission. 

Under Former Regulation 19.01(a), Form 204 filers were required to include data 

showing the composition of their fixed-price cash positions in each commodity hedged, 

including, among other things, the quantities of: (a) the stocks owned; (b) open fixed-price 

purchase commitments; and (c) open fixed-price sale commitments. Form 204s were required to 

be filed on a monthly basis. Former Regulation 19.10(b), 17 C.F.R. § 19.01(b) (2020), removed 

by Position Limits for Derivatives, 86 Fed. Reg. 3236 (Jan. 14, 2021) (effective Mar. 15, 2021). 

During the Relevant Period, Tyson held positions in soybean meal and corn in excess of 

position limits, and was, therefore, required to file monthly Form 204s. Because Tyson filed 

Form 204 reports which did not accurately state the quantities of Tyson’s fixed-price cash 

soybean meal or corn exposure, and which included but misstated Tyson’s cash soybean oil 

position, Tyson violated Former Regulation 19.01(a). 

C. RECORDKEEPING 

Section 4i of the Act, 7 U.S.C. § 6i (2018), makes it unlawful for any person to make any 

contract for the purchase or sale of any commodity for future delivery on or subject to the rules 

of any contract market in excess of position limits established by the Commission, unless, “in 

accordance with rules and regulations of the Commission, such person shall keep books and 

records of all such transactions and positions and transactions and positions in any such 

commodity traded on or subject to the rules of any other board of trade or electronic trading 

facility, and of cash or spot transactions in, and inventories and purchase and sale commitments 

of such commodity.” Section 4i specifies that “[s]uch books and records shall show complete 

details concerning all such transactions, positions, inventories, and commitments, including the 

names and addresses of all persons having any interest therein ....” 

Regulation 1.31(b)(3), 17 C.F.R. § 1.31(b)(3) (2020), specifies that such records shall be 

maintained for a period of five years.7

 Regulation 1.31(c), 17 C.F.R. § 1.31(c) (2020), specifies 

that such records shall be created and retained in a form and manner that ensures the authenticity 

and reliability of such records. There is no scienter requirement for recordkeeping violations. 

CFTC v. eFloorTrade, LLC, No. 16 CIV. 7544 (PGG), 2018 WL 10625588, at *7 (S.D.N.Y. 

Sept. 21, 2018) (granting CFTC’s motion for summary judgment on recordkeeping violations). 

Because Tyson exceeded position limits in soybean meal and corn during the Relevant 

Period, it was required for a period of five years to maintain records showing complete details of 

cash transactions in those commodities. Tyson failed to do so with respect to records of certain 

 

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 Regulation 1.31(a), 17 C.F.R. § 1.31(a) (2020), defines “records entity” to mean any entity required to 

keep records under the Act or Regulations, and defines “regulatory records” to be any records required to 

be kept under the Act or Regulations. 
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cash soybean meal and corn transactions during the Relevant Period and, therefore, violated 

Section 4i of the Act and Regulation 1.31(b)(3) and (c). 

IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, Tyson 

violated Sections 4a(b) and 4i of the Act, 7 U.S.C. §§ 6a(b), 6i (2018), Regulation 1.31(b)(3) and 

(c), 17 C.F.R. § 1.31(b)(3), (c) (2020); and Former Regulations 19.01(a) and 150.2, 17 C.F.R. 

§§ 19.01(a), 150.2 (2020). 

V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which it, without admitting or denying the 

findings and conclusions herein: 

A. Acknowledges service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waives: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that Respondent may possess under the Equal Access to Justice 

Act, 5 U.S.C. § 504 (2018), and 28 U.S.C. § 2412 (2018), and/or the rules 

promulgated by the Commission in conformity therewith, Part 148 of the 

Regulations, 17 C.F.R. pt. 148 (2020), relating to, or arising from, this proceeding; 

7. Any and all claims that Respondent may possess under the Small Business 

Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, 

§§ 201–253, 110 Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and 

in scattered sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this 

proceeding; and 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 
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D. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondent has consented in the Offer; and 

E. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Respondent violated Sections 4a(b) and 4i 

of the Act, 7 U.S.C. §§ 6a(b), 6i (2018), Regulation 1.31(b)(3) and (c), 17 C.F.R. 

§ 1.31(b)(3), (c) (2020), and Former Regulations 19.01(a) and 150.2, 17 C.F.R. 

§§ 19.01(a) (2020), 150.2 (2020); 

2. Orders Respondent to cease and desist from violating Sections 4a(b) and 4i of the 

Act and Regulation 1.31(b)(3) and (c) (2020); 

3. Orders Respondent to pay a civil monetary penalty in the amount of one million 

five hundred thousand dollars ($1,500,000), plus post-judgment interest within 

thirty days of the date of entry of this Order; 

Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

1. Respondent shall cease and desist from violating Sections 4a(b) and 4i of the Act, 

7 U.S.C. §§ 6a(b), 6i (2018), and Regulation 1.31(b)(3) and (c), 17 C.F.R. § 1.31(b)(3), 

(c) (2020); 

2. Respondent shall pay a civil monetary penalty in the amount of one million five hundred 

thousand dollars ($1,500,000) (“CMP Obligation”), within thirty days of the date of the 

entry of this Order. If the CMP Obligation is not paid in full within thirty days of the 

date of entry of this Order, then post-judgment interest shall accrue on the CMP 

Obligation beginning on the date of entry of this Order and shall be determined by using 

the Treasury Bill rate prevailing on the date of entry of this Order pursuant to 28 U.S.C. 

§ 1961 (2018). 

Respondent shall pay the CMP Obligation and any post-judgment interest by electronic 

funds transfer, U.S. postal money order, certified check, bank cashier’s check, or bank 

money order. If payment is to be made other than by electronic funds transfer, then the 

payment shall be made payable to the Commodity Futures Trading Commission and sent 

to the address below: 

CFTC 

C/O ESC/AMK-326; RM 265 

6500 S. MacArthur Blvd. 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 fax 

9-AMC-AR-CFTC@faa.gov 
If payment is to be made by electronic funds transfer, Respondent shall contact Marie 

Thorne or her successor at the above address to receive payment instructions and shall 

fully comply with those instructions. Respondent shall accompany payment of the CMP 

Obligation with a cover letter that identifies the paying Respondent and the name and 

docket number of this proceeding. The paying Respondent shall simultaneously transmit 

copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

3. Respondent and its successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Public Statements: Respondent agrees that neither it nor any of its successors and 

assigns, agents or employees under its authority or control shall take any action or 

make any public statement denying, directly or indirectly, any findings or 

conclusions in this Order or creating, or tending to create, the impression that this 

Order is without a factual basis; provided, however, that nothing in this provision 

shall affect Respondent's: (i) testimonial obligations; or (ii) right to take legal 

positions in other proceedings to which the Commission is not a party. 

Respondent and its successors and assigns shall comply with this agreement, and 

shall undertake all steps necessary to ensure that all of its agents and/or 

employees under its authority or control understand and comply with this 

agreement. 

2. Partial Satisfaction: Respondent understands and agrees that any acceptance by 

the Commission of any partial payment of Respondent's CMP Obligation shall 

not be deemed a waiver of its obligation to make further payments pursuant to this 

Order, or a waiver of the Commission's right to seek to compel payment of any 

remaining balance. 

3. Change of Address/Phone: Until such time as Respondent satisfies in full its 

CMP Obligation as set forth in this Order, Respondent shall provide written 

notice to the Commission by certified mail of any change to its telephone number 

and mailing address within ten calendar days of the change. 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

~h~-

Christopher J. Kirkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: August 13, 2021 

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